Right to acquire securities

The taxpayer was born in the UK. In November 2001 he joined a new insurance entity in Bermuda as its president and chief executive. He was awarded three tranches of share options which were conditional on his continued employment with the company. He was later also awarded restricted shares. As part of an initial public offering his original restricted shares were exchanged for restricted shares in a new company and his options became options over those shares.

In March 2008 the taxpayer exercised the options and sold the shares. He said no UK tax was due on the options because he was not resident in the UK.

The First-tier Tribunal decided the taxpayer had acquired a securities option only when each tranche became exercisable as opposed to the date on which the share option was granted. So he was liable to UK tax on the first...