In John Charman v HMRC [2021] EWCA Civ 1804, the Court of Appeal held that share options were taxable when they were granted not when exercised, and restricted shares were issued by virtue of the taxpayer's employment.

The First Tier Tribunal (FTT) had determined that:

The Upper Tribunal (UT) allowed HMRC’s appeal finding that:

They dismissed Mr Charman’s appeal agreeing that the restricted shares were acquired by reason of Mr Charman’s employment.

Mr Charman appealed the UT’s decision on both counts. The Court of Appeal dismissed his appeals:

Useful guides on this topic

Employment Related Securities
What are the tax consequences when a company gives shares to an employee or director? What are employment-related securities? What is best: shares or share options? How do you set up a share scheme?

ABC or alphabet shares: directors & employees
Can you set up different classes of shares? How do you create Alphabet or ABC shares? What are the rules in giving different classes of shares to directors and employees? 

Statutory residence test toolkit
This is a freeview interactive tool to determine 'At a glance' whether you are UK resident or not in a tax year for 2013/14 onwards.

Residence v non-residence: tax treatment 
What are the differences between being UK resident and non-UK resident for UK tax purposes?           

SRT: Statutory Residence test
What is the statutory residency test? Why is it important and how does it work?

Non-resident Tax Toolkit
This toolkit covers the key UK tax issues for non-UK resident individuals holding UK assets and property and working in the UK.

External link

John Charman v HMRC [2021] EWCA Civ 1804 


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