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HMRC internal manual

Capital Gains Manual

Shares acquired on same day: election for alternative treatment: restricted shares

Under TCGA92/S104(4), where shares that an individual acquires as an employee are subject to restrictions on the right to dispose of them, the shares are treated as being of a different class from that to which they would otherwise belong. Once the restrictions are lifted, these shares come within the scope of any election made by the individual in respect of shares of that class acquired in the same capacity and on the same day as the restricted shares were originally acquired.

There is a special timing rule for the Share Incentive Plan, TCGA92/Sch7D/paragraph5, see CG56495. When a participant takes shares out of the Plan he is treated as having disposed of the shares and immediately re-acquired them so the date of acquisition for TCGA92/S105A purposes is the date the shares leave the Plan.