Section 531 | Limitation of charge on exercise of option to acquire shares below market value

(1)This section applies if the option is to acquire shares at less than their market value—

(a)at the time when the option is granted, or

(b)if it is a replacement option, at the time when the original option was granted,

or at nil cost.

(2)If this section applies, the section 476 gain is—

(3)“The chargeable market value” means—

(a)the market value of the shares—

(i)at the time when the option was granted, or

(ii)if it is a replacement option, at the time when the original option was granted, or

(b)the market value of the shares at the time when the option is exercised,

whichever is lower.

(3A)Repealed

(4)In this section “the section 476 gain” means the amount under section 478 (amount of charge under section 476) is to be regarded as the taxable amount for the purposes of section 476 in respect of the acquisition of the shares pursuant to the option.^F1

(5)This section has effect subject to section 532 (modified tax consequences following disqualifying events).