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Subject:   treatment of options granted in the UK
Date:   Fri, 11 Mar 2005
From:   Rupert

Dear Mr. Gray,

I work for the US subsidiary of a UK-based company. I was issued share options under a UK incentive scheme 5 years ago, but I have been a resident in the US for the last 3 years.

I believe that my option plan follows the requirements for ISO options, but this is not explicitly stated in my plan and there is no reference to any IRS regulations.

Could these options qualify as ISOs?

Thank You,
Rupert

Answer

Date:   Fri, 08 Apr 2005

Hello Rupert,

No. The plan must state that it is an ISO plan to qualify, and any options that don't qualify as ISOs are non-qualified options.

Good luck!

Mike Gray

For more information about incentive stock options, request our free report, Incentive Stock Options - Executive Tax and Financial Planning Strategies.

IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained in this answer was not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code.