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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Employment-related securities: employee: restricted securities: clogging

The employer may offer shares or other employment-related securities to the employee on terms which restrict the employee’s ability to dispose of them. For instance the employee may be required to sell back the shares or securities at par, if he or she does not remain in employment with the employer for a specified length of time. These restrictions are sometimes referred to as a `clog’. As long as the restriction remains in force

  • the employer holds retained rights over the shares or securities


  • the employee holds restricted shares or securities which are treated separately from any other shares of the same class not acquired as an employee or not subject to restrictions, or the same restrictions, on disposal by virtue of TCGA92/S104(4), see CG50750-1.

See the example at CG56348.