Income Tax (Earnings and Pensions) Act 2003 Schedule 7 paragraphs 62–67

Share options

Schedule 7 paragraphs 62–67 provide transitional rules for the tax treatment of share options that were acquired before 6 April 2003, ensuring that the move from the old Schedule E regime to the new ITEPA 2003 framework does not result in unfair double taxation or incorrect residence-based exclusions.

• For share options acquired before 6 April 2003, the residence exclusion test under section 474 is modified to refer to the old Schedule E Case I chargeability test rather than the new earnings-based wording
• Any amount already charged to tax under Schedule E when a securities option was originally acquired counts as a deductible amount when calculating the charge under section 478
• Where a chargeable event arises on the exercise, assignment, or release of a pre-6 April 2003 share option, any tax previously charged under the old approved share option scheme discount rules (section 185(6) of ICTA) is treated as a deductible amount to the extent it relates to the shares in question
• Paragraphs 62, 66, and 67 have been repealed and are no longer in force