Income Tax (Earnings and Pensions) Act 2003

[F1 Chapter 4 U.K. Post-acquisition benefits from securities

Textual Amendments

F1 Pt. 7 Ch. 4 (ss. 447-450) substituted for Pt. 7 Ch. 4 (ss. 447-470) (16.4.2003 with effect in accordance with Sch. 22 para. 9(2)-(4) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 9(1)

447 Charge on other chargeable benefits from securities U.K.

(1) This Chapter applies if an associated person receives a benefit by virtue of the ownership of employment-related securities by that person or another associated person.

(2) The taxable amount determined under section 448 counts as employment income of the employee for the relevant tax year.

(3) The “relevant tax year” is the tax year in which the benefit is received.

(4) This section does not apply if the benefit is otherwise chargeable to income tax.

(5) This section is subject to section 449 (case outside this Chapter).

448 Amount of charge U.K.

The taxable amount for the purposes of section 447 (charge on other chargeable benefits) is the amount or market value of the benefit.

449 Case outside this Chapter U.K.

(1) This Chapter does not apply if—

(a) the employment-related securities are shares (or an interest in shares) in a company of a class,

(b) a similar benefit is received by the owners of all the company’s shares of the class, and

(c) subsection (2) or (3) is satisfied.

(2) This subsection is satisfied if, immediately before the receipt of the benefit, the company is employee-controlled by virtue of holdings of shares of the class.

(3) This subsection is satisfied if, immediately before the receipt of the benefit, the majority of the company’s shares of the class are not held by or for the benefit of any of the following—

(a) employees of the company,

(b) persons who are related to an employee of the company,

(c) associated companies of the company,

(d) employees of any associated company of the company, or

(e) persons who are related to an employee of any such associated company.

(4) For the purposes of subsection (3) a person is related to an employee if—

(a) the person acquired the shares pursuant to a right or opportunity available by reason of the employee’s employment, or

(b) the person is connected with a person who so acquired the shares or with the employee and acquired the shares otherwise than by or under a disposal made by way of a bargain at arm’s length from the employee or another person who is related to the employee.

450 Definitions U.K.

(1) In this Chapter—

• “interest”, in relation to shares, and

• “shares”,

• have the meaning indicated in section 420(8).

(2) In this Chapter “market value” has the meaning indicated in section 421(1).

(3) In this Chapter—

• “the employee” (except in section 449), and

• “employment-related securities”,

• have the meaning indicated in section 421B(8).

(4) In this Chapter “associated person” has the meaning indicated in section 421C.

(5) In this Chapter—

• “associated company”, and

• “employee-controlled”,

• have the meaning indicated in section 421H.]

Tax charge where restrictions or rights varied U.K.

F1 451 Amount of charge U.K.

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F1 452 Cases outside charge under section 449 U.K.

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Tax charge on increase in value of shares of dependent subsidiaries U.K.

F1 453 Charge on increase in value of shares of dependent subsidiary U.K.

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F1 454 Chargeable increases U.K.

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F1 455 Amount of charge U.K.

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F1 456 Cases outside charge under section 453 U.K.

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Tax charge on other benefits from shares U.K.

F1 457 Charge on other chargeable benefits from shares U.K.

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F1 458 Chargeable benefits U.K.

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F1 459 Amount of charge U.K.

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F1 460 Cases outside charge under section 457 U.K.

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Supplementary provisions U.K.

F1 461 Related acquisitions of additional shares U.K.

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F1 462 Company reorganisations etc. U.K.

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F1 463 Disposals of shares to connected persons etc. ignored U.K.

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F1 464 Application to interests in shares U.K.

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F1 465 Duty to notify acquisitions of shares or interests in shares U.K.

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F1 466 Duty to notify chargeable events and chargeable benefits U.K.

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Interpretation U.K.

F1 467 Meaning of “dependent subsidiary” U.K.

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F1 468 Meaning of “employee-controlled” U.K.

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F1 469 Shares “held by outside shareholders” U.K.

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F1 470 Minor definitions U.K.

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