§ Mr. PearsonTo ask the Chancellor of the Exchequer if he will list(a) the cost to the Exchequer in 1995–96, (b) the estimated likely costs in (i) 1996–97 and (ii) 1997–98 of approved discretionary share option schemes and (c) the estimated costs of company share option plans in 1998–99. [15101]
§ Mr. Jack[holding answer 10 February 1997]: Available provisional estimates are as follows:
Estimated cost of tax relief1 £ million Approved discretionary share option schemes2 1995–96 70 1996–97 80 Information on share schemes comes from annual returns which must be submitted by companies operating schemes. The latest year for which forms have been received and processed is 1994–95. The estimated cost of tax relief for executive share option schemes for 1994–95 is £60 million. This cost has been projected forward using, changes in the general level of share prices, and assumes a similar level of options exercised.
1 Estimated costs are the effects on tax liabilities for each year, and not the receipts in each year. Figures are tentative and subject to a wide margin of error.
2 The costs take account that relief from income tax is partially offset by liability to capital gains tax arising from disposals of shares acquired under the scheme.
Figures for further years are not available, however it is estimated that the first full-year cost of tax relief for company share option plans may eventually be around £90 million.