ERSM110600 - Securities Options

Non-residents: exercise after leaving UK

Post-Schedule 22

If a person was resident and ordinarily resident with earnings taxable under sections 15 or 21 (Case I Schedule E) when the right to acquire securities was itself acquired (for example, when the option was granted) then, even if they have become non-resident by time the securities are acquired, or some other chargeable event occurs, they are still chargeable under Chapter 5.

If a person was either not resident or not ordinarily resident at the date when the right was acquired there may be a charge under Chapter 3C at the time the securities are acquired (see ERSM70000+).

Pre-ITEPA & Schedule 22 – old rules

If a person was resident and ordinarily resident with earnings taxable Case I Schedule E, when the right to acquire securities was itself acquired (for example, when the option was granted), then even if they became non-resident by time the securities were acquired, or some other chargeable event occurs, they were still chargeable under ICTA88/S135.

If a person was either not resident or not ordinarily resident at the date when the right was acquired there might be a charge under ICTA88/S162 (5) at the time of disposal of the shares. The charge was on the difference between the market value of the shares at the time of exercise less any amounts paid. This was treated as a notional loan written off within ICTA88/S162 (2) and as emoluments of the employment (see ERSM70000+).