Commentary on Sections Example 3 Ne = £5,000; Da = 183; De = 183; Smg = 0 Section 479: Amount of gain realised by exercising option
1982.This section brings together the parts of section 135(3) and (6) of ICTA which provide the rules regarding the computation of the gain on exercise and a further rule in section 185(8) of ICTA. That rule allows a deduction in calculating the amount of the gain for any charge to tax under section 185(6) of ICTA in respect of the grant at a discount of a share option under an approved CSOP scheme. Those parts of section 135(3) of ICTA which relate solely to the gain on an assignment or release appear in a separate section. The method adopted leads to some repetition between this section and section 480, in order to assist the reader.
1983.Subsection (1) introduces a formula for calculating the gain.
1984.Subsection (2) specifies the items which are deductible costs in calculating the gain.
1985.Subsection (3) derives from the closing words of section 135(4) of ICTA and ensures that the amount paid for the option is deducted only once. It should be noted that section 135(9) of ICTA replicates the effect of section 135(4) of ICTA and has not been separately rewritten. This removes unnecessary material.
1986.Subsection (4) provides a signpost to the EMI provisions which modify the calculation of the amount of the gain.