D5. Surrender of rights/assets

EMPLOYMENT INCOME

- Release of employment-related securities option

- Release of employment-related securities option for consideration gives rise to income tax (s.477; ETASSUM54060).

Legislation: ITEPA 2003, s.477;

Cases:

HMRC manuals:

Commentary:

ETASSUM54060 - Enterprise Management Incentives (EMI): Requirements relating to options: Amendments to options;

CHARGEABLE GAINS

Capital sum derived from asset

- Capital sum for waiver/surrender as a deemed disposal

- A capital sum received in return for waiving or surrendering a right/asset gives rise to a deemed disposal of that right/asset.

- Bensons Hosiery - a company received a payment in return for waiving its rights under a director's service agreement so as to release the director. Held: this was a capital sum derived from its contractual rights.

- It was common ground that the sum was capital (at 572). Query whether that was correct. See E2. Trading receipts.

Legislation:

Cases: O’Brien v Bensons Hosiery (Holdings) Ltd [1980] AC 562 (HoL);

HMRC manuals: CG13000 - Capital sums derived from assets: s22(1) TCGA92: contractual rights;