Paragraph 11, Schedule 2, SSCR 2001
The above provision explains how to calculate the amount of earnings, using the example in NIM06967 -
Step one
| Market value of shares on exercise of option C | = £80,000 |
| Exercise price paid for shares | = £30,000 |
| Difference | = £50,000 |
Step two
When option B was released for option C on 16 May 2002,
paragraph 16A(4), Part 1X, Schedule 3, SSCR 2001 was not satisfied
because there was an increase in the discount, i.e. from
£20,000 to £30,000. The discount on option B was
£20,000, i.e. the amount that could have been gained if the
employee had exercised the option at that time.
Step 3
Step one amount £50,000 less Step Two amount
£20,000 = £30,000
Step Four
There is nothing to subtract from the result of Step Three
because nothing was taken into account in computing the employee's
earnings at the time of the grant of the option, nor did the
employee give any consideration (excepting options A and B) to
acquire options B or C. Therefore, the amount of earnings on
exercise of option C is £30,000.
