Taxation of Chargeable Gains Act 1992 section 149AA

Restricted and convertible employment-related securities

Section 149AA sets out how to determine the base cost for capital gains tax purposes when an individual acquires employment-related securities that are restricted or convertible, or acquires employee shareholder shares.

• For restricted or convertible employment-related securities, the base cost is the actual price paid plus any amount already taxed as employment income on the acquisition.
• For employee shareholder shares, the base cost is limited solely to any amount taxed as employment income — no other consideration counts towards the acquisition cost.
• These base cost rules apply only to the acquiring individual and do not affect the capital gains position of the person disposing of the securities.
• Any amount that qualified as exempt income for income tax purposes is excluded from the earnings figure added to base cost.