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HMRC internal manual

Capital Gains Manual

Employee share schemes: trustees: acquisition cost

If shares or other securities are disposed of from the trust to the employees, the Capital Gains Tax position of the trustees will depend on how the trust acquired these assets.

  • If they were acquired by the trustees on the open market, the cost of the shares or securities to the trustees will be whatever the trustees paid for them.
  • If shares were issued to the trustees by the company (or by some connected company), as the issue of shares by a company is not a disposal of those shares the cost to the trustees will be whatever the trustees paid for the shares, up to their market value, see CG14550.
  • If the trustees acquired assets directly from an individual or close company shareholder and the transfer benefits from favourable IHT treatment, the disposal and acquisition consideration may be determined by S239 TCGA92 see CG36000+.

For further details on obtaining the market value of the shares, see CG56550+.