Clause 35 - Exercise of options etc
Finance Bill
12:00 pm
John Healey (Financial Secretary, HM Treasury; Wentworth, Labour)
If it did, we would not need to introduce the clause. In the context of the operation of the capital gains tax rules, the transfer pricing mechanism does not cover the problem. Under these measures, the tax liability will be based on the value of the asset bought or sold, instead of on the uncommercial option price. The same position applies for assets given away or sold at an uncommercial price without using an option.
The measures are targeted at people who use that device to avoid tax. Companies and individuals who exercise options at arm’s length on normal commercial terms will not be affected and will face no additional compliance burden. Employees who participate in approved company share option plans will also be unaffected.