CG17908 - Taper relief: qualifying holding period: assets acquired under an option

TCGA92/SCHA1/PARA13, TCGA92/S144

TCGA92/SCHA1/PARA13 explains how taper relief interacts with options within TCGA92/s144. Where TCGA92/S144 applies, see CG12310+ and CG55400+, the grant (or acquisition) and exercise of an option fall to be treated as one transaction.

Except in the case of shares allocated to employees under the Enterprise Management Initiatives scheme, see CG 56440+, the date of acquisition of an asset acquired by exercise of an option for taper relief in these circumstances shall be taken to be the time the option is exercised, or 6 April 1998 if later.

- EXAMPLE

In July 1998 an individual was granted an option to acquire a piece of land. In November 2000 she exercised the option and acquired the land. In May 2001 she sold the land and made a chargeable gain.

For taper relief purposes her qualifying holding period begins in November 2000. The qualifying holding period is less than one complete year and so the whole of the chargeable gain is included in the taxable amount.