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HMRC internal manual

Employment Related Securities Manual

HM Revenue & Customs
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Employment-related securities and options: exclusions: 7 year rule

Securities cease to be ‘employment-related’, seven years after the employee leaves employment with any of:

  • the employer, or a person connected with the employer, and
  • the company which issued the securities, or a person connected with the company

(ITEPA03/S421B (7)).

Options not exempt

This rule does not exempt employment-related securities options from Chapter 5 of Part 7 and there is still a chargeable event whenever the securities are acquired on exercise, etc after leaving the employment. In such circumstances, and in accordance with the 7 year rule, the securities obtained will cease to be “employment-related” 7 years after their acquisition.