Taxation of Chargeable Gains Act 1992

[F1149AARestricted and convertible employment-related securities [F2and employee shareholder shares] U.K.

(1)[F3Subject to subsection (1A), where] an individual has acquired an asset consisting of employment-related securities which are—

(a)restricted securities or a restricted interest in securities, or

(b)convertible securities or an interest in convertible securities,

the consideration for the acquisition shall (subject to section 119A) be taken to be equal to the aggregate of the actual amount or value given for the employment-related securities and any amount that constituted earnings under Chapter 1 of Part 3 of ITEPA 2003 (earnings) in respect of the acquisition.

[F4(1A)Where an individual has acquired an asset consisting of shares which, on acquisition, became employee shareholder shares—

(a)the consideration for the acquisition is (subject to section 119A) to be taken to be equal to any amount that constituted earnings under Chapter 1 of Part 3 of ITEPA 2003 (earnings) or section 226A of that Act (employee shareholder shares), and

(b)no other consideration is to be treated as having been given for the acquisition of the shares.]

(2)[F5Subsections (1) and (1A) apply] only to the individual making the acquisition and, accordingly, [F6are] to be disregarded in calculating the consideration received by the person from whom the employment-related securities are acquired.

(3)This section has effect in relation to acquisitions on or after the day appointed under paragraph 3(2) of Schedule 22 to the Finance Act 2003.

(4)In this section “employment-related securities” has the same meaning as in Chapters 1 to 4 of Part 7 of ITEPA 2003 (as substituted by Schedule 22 to the Finance Act 2003).

(5)In this section—

  • “restricted interest in securities”, and

  • “restricted securities”,

have the same meaning as in Chapter 2 of that Part of ITEPA 2003 (as so substituted).

(6)In this section “convertible securities” has the same meaning as in Chapter 3 of that Part of ITEPA 2003 (as so substituted).

[F7(6A)For the purposes of this section—

  • shares are “acquired” by an employee if the employee becomes beneficially entitled to them (and they are acquired at the time when the employee becomes so entitled);

  • “employee shareholder share” means a share acquired in consideration of an employee shareholder agreement and held by the employee;

  • “employee shareholder agreement” means an agreement by virtue of which an employee is an employee shareholder (see section 205A(1)(a) to (d) of the Employment Rights Act 1996);

  • “employee” and “employer company”, in relation to an employee shareholder agreement, mean the individual and the company which enter into the agreement.]

[F8(7)[F9In subsections (1) and (1A) a] reference to any amount that constituted earnings under Chapter 1 of Part 3 of ITEPA 2003 [F10or was treated as earnings under section 226A of that Act] does not include[F11—

(a)]any amount of exempt income (within the meaning of section 8 of that Act)[F12, or

(b)in a case in which the amount that constituted, or was treated as, earnings was not an amount of general earnings to which any of the charging provisions of Chapters 4 and 5 of Part 2 of ITEPA 2003 applied, any amount that would have been an amount of such exempt income if any of those charging provisions had applied.]]]

Textual Amendments

F1S. 149AA inserted (10.7.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 52(1)

F2Words in s. 149AA heading inserted (1.9.2013) by Finance Act 2013 (c. 29), Sch. 23 paras. 19(6)(b), 38; S.I. 2013/1755, art. 2

F3Words in s. 149AA(1) substituted (1.9.2013) by Finance Act 2013 (c. 29), Sch. 23 paras. 19(2), 38; S.I. 2013/1755, art. 2

F5Words in s. 149AA(2) substituted (1.9.2013) by Finance Act 2013 (c. 29), Sch. 23 paras. 19(4)(a), 38; S.I. 2013/1755, art. 2

F6Word in s. 149AA(2) substituted (1.9.2013) by Finance Act 2013 (c. 29), Sch. 23 paras. 19(4)(b), 38; S.I. 2013/1755, art. 2

F7S. 149AA(6A) substituted (with effect in accordance with s. 13(6)-(8) of the amending Act) by Finance Act 2017 (c. 10), s. 13(3)

F8S. 149AA(7) inserted (with effect in accordance with s. 49(9) of the amending Act) by Finance Act 2008 (c. 9), s. 49(1)

F9Words in s. 149AA(7) substituted (1.9.2013) by Finance Act 2013 (c. 29), Sch. 23 paras. 19(6)(a), 38; S.I. 2013/1755, art. 2

F10Words in s. 149AA(7) inserted (1.9.2013) by Finance Act 2013 (c. 29), Sch. 23 paras. 19(6)(b), 38; S.I. 2013/1755, art. 2

F11Words in s. 149AA(7) inserted (with effect in accordance with Sch. 9 para. 48 of the amending Act) by Finance Act 2014 (c. 26), Sch. 9 paras. 27(a), 47

F12S. 149AA(7)(b) and preceding word inserted (with effect in accordance with Sch. 9 para. 48 of the amending Act) by Finance Act 2014 (c. 26), Sch. 9 paras. 27(b), 47