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Hard luck
In May 1998 the (now former) chief executive Angus Monro of Matalan plc was granted for no consideration an option to acquire well over one million shares in Matalan at an exercise price of zero. Two days after the grant he exercised the option and acquired the shares for nothing. Their market value was over £3 million. In May 1999 he sold 900 000 shares for some £7.3 million.
In his 1998-99 tax return he declared a gain accruing on the exercise of the option and chargeable under Schedule E under TA 1988 s 135 and paid the tax. The following year he declared a gain of £5.2 million on which he paid tax. He computed the gain by deducting the base cost of the shares sold (£2.1 million) from the proceeds of the sale (£7.3 million); see TCGA 1992 ...
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