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(1)This Chapter applies to a share option granted by reason of a person’s office or employment as a director or employee of a company.
(2)The person may be a director or employee of the company whose shares are the subject of the share option, or of another company.
(3)The share option may be granted to the director or employee or to another person.
(4)In this Chapter, a “share option” means a right to acquire shares in a company and (unless the context indicates a different meaning)—
“the employee”, in relation to a share option, means the person mentioned in subsection (1); and
“the share option” means the right to acquire shares mentioned there;
and “director” and “employee” have the extended meaning given by section 487(1).
(1)The starting-point is that liability to tax may arise by virtue of Chapter 1 of Part 3 (earnings) or Chapter 10 of that Part (taxable benefits: residual liability to charge) when the share option is received, but not when it is exercised.
(2)But section 474 (no charge in respect of receipt of shorter-term option) contains an exemption from this liability.
(3)Liability to tax may arise when the share option is exercised by virtue of—
(a)Chapter 8 of Part 3 (taxable benefits: notional loans in respect of acquisitions of shares), or
(b)section 476 or 477 (charge on exercise etc. of option).
(4)Liability to tax may also arise when the share option is assigned or released by virtue of section 476 or 477.
(5)There are special rules relating to share options received under—
(a)approved SAYE option schemes (see Chapter 7 of this Part),
(b)approved CSOP schemes (see Chapter 8 of this Part), or
(c)enterprise management incentives (see Chapter 9 of this Part).
(1)This Chapter (apart from sections 472 and 485) does not apply to a share option granted by reason of a person’s office or employment if the earnings from the office or employment were not (or would not have been if there had been any) general earnings to which section 15 or 21 applies (earnings for year when employee resident and ordinarily resident in the UK).
(2)This Chapter (apart from sections 472 and 485) does not apply to a share option so granted after the person has ceased to hold the office or employment, if it would not apply in the event of the option being granted in the last tax year in which the office or employment was held.
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