The Chancellor has made a wise decision in reversing an unexpected ruling by the Courts over tax relief on share options, says The Chartered Institute of Taxation, CIOT. Contacts: Viv Rees, Head of Communications: 0207 245 4109 (O)
07900 220 887 (M)
Press Office: Penny Finch; 020 7235 9381.
The Chancellor has made a wise decision in reversing an unexpected ruling by the Courts over tax relief on share options, says The Chartered Institute of Taxation, CIOT.
As expected he has reversed the decision of the Court of Appeal in the celebrated Mansworth v Jelley case late last year, which effectively allowed tax relief twice on the costs of certain shares acquired under share option schemes.
Tim Ambrose, CIOT Vice-President, said:
“We were extremely surprised by the Court’s extraordinary decision. We are now back to the situation that when a person exercises share options, their base cost is the amount they have paid under the options plus the amount on which they have suffered an income tax charge – the common sense value.”
Many people with unapproved share options have found themselves with capital losses they hadn’t expected. This will not happen on options exercised after today.
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