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HMRC internal manual

Capital Gains Manual

Options: exercise of an option: consequential adjustments

As a consequence of the option being exercised, the grant of the option ceases to be an occasion of charge. Accordingly any tax charged on the grant needs to be set-off or repaid.

The legislation does not provide any special procedure under which the taxpayer should notify you that the option has been exercised. You should therefore treat any notification by the taxpayer, whether at the time they complete a Return or separately, as a basis for considering whether any set-off or repayment is due.

For detailed guidance on the clerical procedures, see Issue Repayment, SAM110230+, in the Self Assessment Manual.