Finance Act, 1992

Amendment of section 47 (options) of Capital Gains Tax Act, 1975.

63.Section 47 of the Capital Gains Tax Act, 1975 , is hereby amended, as on and from the 7th day of May, 1992—

(a) in subsection (3), by the deletion of “or abandonment”,

(b) by the insertion after subsection (3) of the following subsection:

“(3A) (a) The abandonment of an option by the person for the time being entitled to exercise it shall constitute the disposal of an asset (namely, the option) by that person.

(b) Subject to subsection (5) and paragraph (a) of subsection (6), the abandonment of an option by the person for the time being entitled to exercise it shall not give rise to an allowable loss.”,

(c) in subsection (5), by the substitution of the following paragraph for paragraph (a):

“(a) if the option is abandoned, paragraph (b) of subsection (3A) shall not apply, and”,

(d) in subsection (6)—

(i) by the substitution of the following paragraph for paragraph (a):

(a) Where—

(i) a quoted option to subscribe for shares in a company, or

(ii) a traded option,

is disposed of or abandoned, then—

(I) if the option is abandoned, paragraph (b) of subsection (3A) shall not apply, and

(II) paragraph 9 of Schedule 1 (restriction of allowable expenditure for wasting asset) and subsection (4) shall not apply.”,

and

(ii) by the substitution in paragraph (b) of “Where a quoted option to subscribe for shares in a company” for “Where an option mentioned in paragraph (a)”,

and

(e) by the addition after subsection (10) of the following subsection:

“(11) In this section—

‘quoted option’ means an option which, at the time of abandonment or other disposal, is quoted, and, in the same manner as shares, dealt in on a stock exchange in the State or elsewhere;

‘traded option’ means an option which, at the time of abandonment or other disposal, is quoted on a stock exchange or a futures exchange in the State or elsewhere.”,

and the said paragraph (b) of the said subsection (6), as so amended, is set out in the Table to this section.

TABLE

(b) Where a quoted option to subscribe for shares in a company is dealt in within three months after the taking effect, with respect to the company granting the option, of any reorganisation, reduction, conversion or amalgamation to which paragraphs 2, 3, 4 or 5 of Schedule 2 applies (or within such longer period as the Revenue Commissioners may by notice in writing allow), the option shall, for the purposes of the said paragraphs 2, 3, 4 or 5, be regarded as the shares which could be acquired by exercising the option and section 49 (3) shall apply for determining its market value.