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HMRC internal manual

Employee Tax Advantaged Share Scheme User Manual

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HM Revenue & Customs
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Schedule 3 SAYE option schemes: Taxation: Disposal of shares – Schedule 3 SAYE option scheme

For shares acquired by tax-relieved exercises of Schedule 3 SAYE share options Paragraph 10(4) of Schedule 7D TCGA 1992 specifically disapplies Section 17(1) TCGA 1992. This means that in computing a capital gain on subsequent disposal of the shares by the employee the base cost to be deducted from the disposal proceeds is:

  • the actual consideration (if any) given for the grant of the option, plus
  • the actual option exercise price paid when acquiring the shares.

For shares acquired by taxable exercises of share options (for example options exercised within three years of grant by virtue of a provision within paragraphs 34(5) or 37), the CGT base cost will normally be the same as for shares acquired by exercising unapproved options.

Further guidance on the CGT consequences for employees share options is at CG56400 onwards.