Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Share option definition

What does Share option mean? A share option is a contractual right to buy (and less commonly to sell) shares at a fixed or formula-based exercise price within a stated period or on specified events. In practice it is a call option over shares, granted either by the company (over unissued shares) or by an existing shareholder (over issued shares). The option gives the holder a right, not an obligation, to acquire the shares; if not exercised before expiry it lapses. The term is descriptive rather than defined in statute or case law, although particular employee share option schemes are defined for tax...

UK Business Asset Disposal Relief for Employee Share Schemes and MBOs: EMI, CSOP, SAYE, SIP, Unapproved Options, Dilution, Eligibility, Timing and Claims

Published by a LexisNexis Share Incentives expert

Practice notes

Background and main requirements for the relief

Business asset disposal relief (BADR) can apply in relation to shares held in trading companies, as well as in the holding companies of trading groups, provided the requirements set out in sections 169H–169SH of the Taxation of Chargeable Gains Act 1992 (TCGA 1992) are met. For disposals occurring on or after 6 April 2026, BADR produces a capital gains tax (CGT) rate of 18% on lifetime chargeable gains, up to a statutory cap that applies to those gains. That limit was reduced from £10m to £1m for qualifying disposals taking place on or after 11 March 2020, by legislation introduced in the Finance Act 2020. Before 6 April 2025, the CGT rate applying where BADR was available was 10%; the Finance Act 2025 increased this to 14% with effect from 6 April 2025, and it also legislated for a further rise to 18% for disposals taking place on or after 6 April 2026...

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Andrew Evans

Geldards LLP

Andrew has spent his career advising owner managers and SME businesses/companies on their tax affairs. In common with many tax advisers in regional law firms, Andrew’s practice covers a wide range of tax areas, from Corporate M&A support, company restructuring and reorganisations including demergers, share schemes and property taxes including vat, SDLT and LTT. Andrew has also developed a specialism advising business owners and companies on selling their company to an Employee Ownership Trust.Andrew was a member of the Welsh Government’s Tax Advisory Group which assisted Welsh Government develop the LTT regime....

Web page updated on 22/05/2026

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