Income Tax (Earnings and Pensions) Act 2003 section 523

No charge in respect of receipt of option

Section 523 confirms that no income tax charge arises simply because an employee receives a share option under the Share Incentive Plan (SIP) or similar approved arrangements.

• No income tax liability arises when an individual receives a share option that falls within the scope of this chapter.
• The exemption applies at the point the option is granted or received, not at the point it is exercised or shares are acquired.
• This ensures that the mere receipt of the option is not treated as a taxable benefit or earning.
• Any tax consequences are instead dealt with at later stages, such as when the option is exercised or the shares are disposed of.