Taxes Consolidation Act 1997 section 519A

Approved savings-related share option schemes

Section 519A provides an exemption from income tax on the grant and exercise of share options obtained under an approved savings-related share option scheme.

• Where an employee or director obtains a right to acquire shares under a savings-related share option scheme approved under Schedule 12A on or after 6 April 1999, no income tax arises on the grant of that right or on any gain realised when the right is exercised.
• Where a trust or company (a "relevant body") holds scheme shares and disposes of them to a participant, no chargeable gain or allowable loss arises for the relevant body, and the participant is treated as having acquired the shares at the price actually paid.
• The exemption on exercise does not apply where the option is exercised within three years of being granted under early-exercise provisions triggered by events such as a takeover, court-sanctioned reconstruction, compulsory acquisition, winding up, or a sale of the employing company or business out of the group.
• The detailed conditions for approval of savings-related share option schemes are set out in Schedule 12A, and the section must be read together with that Schedule.