Income Tax (Earnings and Pensions) Act 2003

450 Chargeable events

(1) This section applies for the purposes of section 449 (charge on occurrence of chargeable event).

(2) Unless excluded by subsection (4), any of the events mentioned in subsection (3) is a “chargeable event” in relation to shares in a company if it increases the value of the shares or would do so but for the occurrence of some other event.

(3) The events are—

(a) the removal or variation of a restriction applying to the shares,

(b) the creation or variation of a right relating to the shares,

(c) the imposition of a restriction applying to other shares in the company,

(d) the variation of a restriction applying to other shares in the company, and

(e) the removal or variation of a right relating to other shares in the company.

(4) An event within subsection (3) is not a “chargeable event” if the restriction or right applies to all shares of the class concerned and any of the following conditions is met at the time of the event—

(a) the company is employee-controlled because of holdings of shares of the relevant class;

(b) the majority of the company’s shares of the relevant class are held by outside shareholders;

(c) the company is a 51% subsidiary with shares of a single class.

(5) “The relevant class” means the class of shares to which the shares belong.

(6) References in this section—

(a) to restrictions to which shares are subject, or

(b) to rights relating to shares,

are references to such restrictions imposed or rights conferred by contract, arrangement or in any other way.