Charman v Revenue And Customs [2021] EWCA Civ 1804 (03 December 2021)

Charman v Revenue And Customs [2021] EWCA Civ 1804 (03 December 2021)

The right to acquire shares (securities option) is acquired at the time of grant, not vesting, for tax purposes under ITEPA 2003. Restricted shares received in a share-for-share exchange retain their employment-related character if the original shares were acquired by reason of employment.

Citation
[2020] UKUT 253
Parties
Appellant: John Charman; Respondents: The Commissioners for Her Majesty's Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
03 December 2021
Procedural Posture
Appeal / Court of Appeal Judgment on Appeal From Upper Tribunal (tax and Chancery Chamber)
Outcome
Appeal dismissed
Legal Topics
Income Tax on Share Options, Employment Related Securities, Taxation of Restricted Shares, Interpretation of ITEPA 2003
Tax Law Employment Law Income Tax on Share Options Employment Related Securities Taxation of Restricted Shares Interpretation of ITEPA 2003

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Parties

John Charman

Appellant

The Commissioners for Her Majesty's Revenue and Customs

Respondents

Procedural Posture

Appeal / Court of Appeal Judgment on Appeal From Upper Tribunal (tax and Chancery Chamber)

Legal Issues

  1. 1 Whether a 'securities option' under Chapter 5 of Part 7 ITEPA 2003 is acquired at grant or vesting for tax purposes
  2. 2 Whether restricted shares acquired in a share-for-share exchange were acquired 'as a director or employee' for the purposes of Chapter 2 of Part 7 ITEPA 2003

Ratio Decidendi

The right to acquire shares (securities option) is acquired at the time of grant, not vesting, for tax purposes under ITEPA 2003. Restricted shares received in a share-for-share exchange retain their employment-related character if the original shares were acquired by reason of employment.

Court Disposition

Appeal dismissed

Orders

  • The decision of the Upper Tribunal is affirmed.