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Mansworth v Jelley [2003] STC 53 was decided by the Court of Appeal in December 2002.
On 8 January the Inland Revenue posted a technical note on its website (reproduced in Taxation 16 January 2003). The note announces that the Revenue will not be appealing against the decision in the Court of Appeal. It then discusses the consequences of the decision.
Unfortunately the analysis set out in the note is incomplete and seriously muddled. Statutory references here are to Taxation of Chargeable Gains Act 1992 unless otherwise stated.
The starting point in Mr Jelley's appeal was that the shares he acquired when he exercised his options were already in existence. If it had been otherwise if the shares had been issued by his employer's parent company in satisfaction of Mr Jelley's options then there would have been no scope for the application of the market...
