Commentary on Sections Example 3 Ne = £5,000; Da = 183; De = 183; Smg = 0 Section 484: Amount or value of consideration given for grant of share option
1993.This section contains supplementary rules for determining the amount allowable as a deduction in respect of the cost of the option in calculating the amount of the gain.
1994.Subsection (2) derives from the rule at the end of section 135(3) of ICTA regarding the apportionment of a single sum paid for both the share option and something else. The wording in that subsection is a “just” apportionment. This has been amended to “just and reasonable” to align the wording with that used in sections 429 and 442. This is a minor change to the law. See Change 124 in Annex 1.
1995.Subsection (3) derives from section 135(4) and provides that no account is taken of the value of the duties of the employment performed by the employee. As mentioned in the explanatory note to section 479, section 135(9) of ICTA has not been rewritten as it replicates the effect of the rule in the final part of section 135(4), that the cost of the option can only be deducted once. That rule is rewritten in sections 479(3) and 480(3).