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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Quoted options to subscribe for shares: treatment of company: grant of option

The issue of a quoted option to subscribe for shares represents the grant of an option by the company and the provisions of TCGA92/S144 apply. The grant of the option is treated as the disposal of an asset, the option itself, Section 144(1). The disposal proceeds are the amount paid by the person to whom the option is issued unless the issue is not a bargain made at arm’s length, TCGA92/S17, see CG14530+. In that case the disposal proceeds will be the market value of the option at the date of issue. This is only likely to be relevant if there is a bonus issue of share warrants, see CG55477.

There is no charge on the company on the grant of share options under an approved share option scheme, see CG56400+.