J Charman v HMRC

In J Charman v HMRC [2021] EWCA Civ 1804 (3 December 2021) the Court of Appeal dismissed the taxpayer’s appeal holding that the taxpayer acquired share options at the time of the grant of the option.

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. As part of a subsequent initial public offering Mr Charman's options became options over Axis Capital (AC) shares. In March 2008 Mr Charman exercised the options.

The FTT had held that Mr Charman did not acquire a ‘securities option’ when the options were granted but only did so on each occasion when a tranche of the options vested. As a result he was not liable to tax...