EMPLOYEE SHARE SCHEME (CH 3A)

Question 1

Explain Cases of options for tax treatment?

Answer 1

Cases of Option:
1-Acquiring of option(no treatment)

2-Disposal of Option
Treatment:
S.P - Cost(Payment)

Question 2

Write cases and taxable treatment of shares (restricted &open)?

Answer 2

CASES OF SHARES:
1-Shares (open) acquired or made available for benefit
Treatment:
FMV - cost(payment)

2-Acquiring of restricted Shares
No Treatment

2-Restricted Shares(non-transferable) Disposal
Treatment:
Sale Price - Cost(payment)

3- Disposal of open Shares
Treatment
Sale price - Deemed cost(FMV in Case 1)

Question 3

Disposal has nothing to do with FMV
Disposal is linked with sale price