Employment-related securities, securities options and capital gains tax

Produced in partnership with Karen Cooper of Cooper Cavendish

Practice notes

Employment-related securities, securities options and capital gains tax

Produced in partnership with Karen Cooper of Cooper Cavendish

Practice notes

Employment-related Securities and securities options

The definition of an employment-related security is broadly any security (which includes Shares, certain rights under contracts of insurance, debt, Derivatives, warrants and interests in investment partnerships and other collective investment schemes) where the right or opportunity to acquire that security (or any interest in it), is made available by reason of the employment of the person acquiring it, or any other person.

Whether or not securities are employment-related will determine the tax treatment at acquisition, disposal and throughout their period of ownership. This Practice Note looks at the interaction of the income tax charging provisions and the Capital gains tax (CGT) rules which apply on the disposal of employment-related securities.

Share options are not classed as employment-related securities and they are referred to as ‘securities options’ for the purposes of the tax rules, although very often options will be granted over employment-related securities.

For further detail on what is an employment-related security, see Practice Note: What is an employment-related security?

The capital gains tax regime

When

Karen Cooper

Cooper Cavendish

Karen is an experienced employee benefits lawyer with more than 20 years’ experience in advising companies of all sizes in relation to their employee benefit and remuneration issues. She trained and worked for leading law firms Baker McKenzie LLP and Linklaters LLP and spent three years as a remuneration consultant at Ernst & Young LLP. Prior to co-founding Cooper Cavendish, Karen headed up Osborne Clarke LLP's employee benefit practice for 15 years.

Karen is a thought-leader and regularly speaks and presents at industry conferences and events. She is a member of the Small Quoted Companies Alliance Share Scheme Committee and the Share Plan Lawyers Organisation.

Karen is also the author of a wide range of legal publications including the chapter on executive remuneration in Sweet & Maxwell’s ‘Corporate Governance’, the chapter on employee share schemes in Jordan’s Company Administration and she contributes regularly to Tax Journal. She is ranked as a leading individual on employees share schemes in Chambers and Partners and was recognised in the 2015 International Tax Review Women in Tax Leaders (a comprehensive guide to the world’s leading female tax advisers).

Jurisdiction(s):

United Kingdom

Key definition:

Securities definition

What does Securities mean?

This is one of the groups of regulated investments defined in the regulated activities order (the other groups being identified as contractually based investments and others).

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