Taxation of Chargeable Gains Act 1992 Schedule 7D paragraph 5

No chargeable gain on shares ceasing to be subject to the plan

Paragraph 5 of Schedule 7D deals with the capital gains tax treatment of shares when they leave a share incentive plan, ensuring that no chargeable gain arises at that point.

• When shares cease to be subject to a share incentive plan, they are treated as disposed of and immediately reacquired by the participant at market value
• This deemed disposal and reacquisition effectively rebases the shares to their market value at the date they leave the plan
• Any gain arising on this deemed disposal is specifically exempt from capital gains tax
• Future gains or losses are calculated from the new base cost, being the market value at the date the shares left the plan