Readers’ forum: Tax implications of stock warrants paid to employee

My client is a stockbroker raising finance for large listed companies. On occasion he is awarded warrants as a sort of commission in addition to his agreed fee.

The warrants allow shares to be purchased within a certain time limit at the share price prevailing on the date the warrant is issued. Therefore if the share price goes up my client will probably purchase the shares and either retain them for a while or sell immediately. The warrants are not negotiated as part of the remuneration package but awarded for performance. On the assumption that the market value of shares is £1 when the warrants are awarded and £2 when my client exercises the option to purchase at £1 my questions are:

• Is there a tax implication when the warrants are awarded – buying a share worth £1 for £1 now?
• If he buys at £1 and sells...