11.5 Using EBT assets to satisfy share awards – CGT
11.5.1 UK resident trust
Under TCGA 1992, s. 144(3), the grant of an option and exercise will be treated as a single transaction, by the original grantee. The grant of an option will not be treated as a disposal by the trustee of the employee trust, but the exercise of the option will be a disposal for CGT purposes.
The case of Mansworth v Jelley established that the exercise of an option is a transaction that is potentially within the scope of TCGA 1992, s. 17, meaning that the market value of the shares transferred to an option-holder on the exercise of an option would be substituted for the exercise price paid for the option.