J Charman v HMRC

In J Charman v HMRC [2020] UKUT 253 (TCC) (27 August 2020) the Upper Tribunal (UT) reversed part of a First-tier Tribunal (FTT) decision holding that in relation to the grant of a share option ‘a right to acquire securities’ arose at the time the relevant share option was granted. The UT upheld the other part of the FTT’s decision that Mr Charman’s restricted shares were acquired by reason of employment.

Mr Charman was born in the UK but moved to Bermuda in November 2001 when he joined Axis Specialty Ltd (ASL). He was awarded share options over ASL shares which vested in three equal tranches conditional on his continued employment with the company and he was later also awarded restricted ASL shares. As part of a subsequent initial public offering Mr Charman’s original restricted shares were exchanged for restricted shares in Axis Capital (and...

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