ERSM161210 - Remittance of FSI and the interaction with capital gains: Introduction

TCGA92/S119A sets out the basic rules governing the acquisition cost of ERS for capital gains tax purposes where the remittance basis does not apply – see ERSM180030. Where the remittance basis applies so as to modify the Part 7 charges referred to in section 119A(3), section 119B will in turn modify the CGT treatment of the assets in question. The Part 7 charges which are dealt with in section 119A(3) are those which arise under the following provisions:

• ITEPA03/S426 (restricted securities)
• ITEPA03/S438, by virtue of section 439(3)(a) (conversion of convertible securities)
• ITEPA03/S446U (securities acquired for less than market value: discharge of notional loan)
• ITEPA03/S447 (receipt of benefit) in a case where the benefit is an increase in the market value of the ERS
• ITEPA03/S476 by virtue of section 477(3)(a) (acquisition of securities pursuant to employment-related securities option)
• FA05/S21(3) (transitional charge in relation to shares in spin-out companies) by virtue of subsection 4(b) of that section (election by employee)