What happens when an individual sells shares immediately after exercising options?

When an individual sells shares immediately after exercising options, it is often the case that no chargeable gain will arise at the point of sale. This situation generally occurs because the selling price and the exercise price are usually aligned, especially if the options are exercised right before the sale.

In many jurisdictions, the exercise of the option itself often generates a personal tax liability based on the market value of the shares at that time, considered income rather than a capital gain. Therefore, any purported gain from a subsequent sale would typically negate any chargeable gain because the selling price would not exceed the exercise price by a significant amount, if at all.

Additionally, the immediate sale implies that there has been no holding period during which the shares would have appreciated in value, further mitigating the potential for any capital gains. Essentially, this structure results in the taxation of the transaction primarily as income, rather than as a realized capital gain.

In summary, when shares are sold immediately after exercising options, registered gains do not usually occur due to the immediate nature of the transactions and the relationship between the exercise price and the market value, thereby justifying the conclusion that no chargeable gain will arise.