(b) (i) Advise Benny of the income tax implications of the grant and exercise of the share options in Summer
Glow plc on the assumption that the share price on 1 September 2007 and on the day he exercises the
options is ￡3·35 per share. Explain why the share option scheme is not free from risk by reference to
the rules of the scheme and the circumstances surrounding the company. (4 marks)
正确答案：
(b)(i)Theshareoptions
Therearenoincometaximplicationsonthegrantoftheshareoptions
InthetaxyearinwhichBennyexercisestheoptionsandacquiresthesharestheexcessofthemarketvalueofthe
sharesoverthepricepaidie￡11500((￡3·35–￡2·20)x10000)willbesubjecttoincometax
Benny’sfinancialexposureiscausedbytherulewithintheshareoptionschemeobliginghimtoholdthesharesfora
yearbeforehecansellthemIfthecompany’sexpansionintoEasternEuropefailssuchthatitsshareprice
subsequentlyfallstolessthan￡2·20beforeBennyhasthechancetosellthesharesBenny’sfinancialpositionmaybe
summarisedasfollows:
–Bennywillhavepaid￡22000(￡2·20×10000)forshareswhicharenowworthlessthanthat
–Hewillalsohavepaidincometaxof￡4600(￡11500×40%)
