Summary
A discovery assessment to income tax on a gain from the exercise of share options was upheld and the income gain was correctly stated, but the tribunal could not give effect to the consequential capital gains tax (CGT) issues.
Background
The appellant was employed by a company that awarded him an option to acquire its shares. The appellant left the company in January 2011. He exercised his share option entitlement in March 2011, and immediately sold the shares, realising a gain. The company deducted income tax at the basic rate.
The appellant disclosed the share disposal in the capital gains pages of his tax return for 2010/11. In March 2014, HM Revenue and Customs (HMRC) raised a discovery assessment (under TMA 1970, s 29), charging income tax in respect of the shares. A penalty was subsequently assessed for a careless error in the appellant’s
