When an asset is acquired by reason of employment, the market value rule, TCGA92/S17 (1), applies unless it is displaced by other legislation.

If a company issues shares to an employee there is no disposal of those shares by the company. However, it is to be expected in this situation that, whatever consideration may actually have been given by the employee, the value of their services (past, present and future) increases that consideration to the market value. Accordingly, Section 17(2) does not disapply Section 17(1) and the employee is treated as having acquired the shares at market value.

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