SolvedCG25395 | Remittance basis: employment-related securities: option
From HM Revenue & Customs · Capital Gains Manual
Changes from 6 April 2025
The remittance basis has been abolished and new rules have been introduced from the 2025/26 tax year.
Please note that cases which occur from 6 April 2025 onwards will be determined in accordance with the new rules.
On a disposal of employment-related securities acquired on the exercise of an option, their acquisition cost may fall to be increased by an amount counting as employment income under Section 476 Part 7 ITEPA03. See TCGA92/S119A (2); CG56328.
Disposals before 6 April 2015
This income may include income charged on the remittance basis. See ITEPA03/S41A and ERSM160000+.
In the first instance, income charged on the remittance basis may not be taken into account in the capital gains computation unless it has been remitted by the end of the year of assessment in which the disposal occurs. If, however, any of the income is remitted later, the taxpayer may make a claim for Section 119A(2) to apply as if the income had been remitted before the end of the year of disposal. The computation of any gain or loss accruing on the disposal may then be revised and any necessary adjustments made by assessment or otherwise without regard to normal time limits.
Disposals on or after 6 April 2015
This income may include chargeable or unchargeable foreign securities income for the purposes of ITEPA03/S41F if the remittance basis applies. See ITEPA03/S41H and ERSM160000+ on internationally mobile employees.
The adjustment made under TCGA92/S119A(2) excludes unchargeable foreign securities income and chargeable unremitted foreign securities income. The acquisition cost is increased only by the amount income which has been counted as employment income (the remitted chargeable foreign securities income).
If any of the chargeable foreign securities income is remitted later, the taxpayer may make a claim for Section 119A(2) to apply as if the income had been remitted before the end of the year of disposal. The computation of any gain or loss accruing on the disposal may then be revised and any necessary adjustments made by assessment or otherwise without regard to normal time limits.
A charge under Part7A ITPEA03 may have the effect of reducing a subsequent amount counting as income under S476 Part 7 ITEPA03. On a disposal of employment-related securities acquired on the exercise of an option, the full amount of the S476 income is normally taken into account as part of the cost of acquisition, any Part 7A income being added back. See TCGA92/S119A (5); CG56384.
The Part 7A income may include income charged on the remittance basis. In the first instance, only such Part 7A income remitted before the end of the year of assessment in which the asset was disposed of may be added back. If, however, any of the income is remitted later, the taxpayer may make a claim for Section 119A(2) to apply as if the income had been remitted before the end of the year of disposal. The computation of any gain or loss accruing on the disposal may then be revised and any necessary adjustments made by assessment or otherwise without regard to normal time limits.