5.5 Chapter 3D – disposal of securities for more than market value
5.5.1 The tax charge
Chapter 3D is the shortest chapter in ITEPA 2003, Pt. 7 and is in point where an employee disposes of securities for more than their market value.
Where an employee disposes of employment-related securities, the difference between the consideration that he or she receives, their market value and expenses incurred by the employee in connection with disposing of the securities will be treated as taxable employment income.
Example 1: sale at more than market value (1)
Kevin holds 1,000 shares in Boats Limited, which he originally purchased for £5.00 per share, which was their unrestricted market value at that time.