xmlns:atom="http://www.w3.org/2005/Atom" xmlns:atom="http://www.w3.org/2005/Atom"

SCHEDULES

SCHEDULE 22U.K.Employee securities and options

Main provisionsU.K.

9(1)For Chapter 4 of Part 7 substitute—U.K.

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

447Charge on other chargeable benefits from securities

(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).

448Amount of charge

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

449Case outside this Chapter

(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.

450Definitions

(1)In this Chapter—

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

(3)In this Chapter—

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

(5)In this Chapter—

(2)Subject to sub-paragraph (3), sub-paragraph (1) has effect on and after 16th April 2003 (so that it applies on and after that date in relation to employment-related securities irrespective of the date of the acquisition).

(3)The provisions of Chapter 4 as originally enacted which are mentioned in sub-paragraph (4)—

(a)continue to apply in relation to shares, and interests in shares, acquired before 16th April 2003, and

(b)apply in relation to shares, and interests in shares, acquired on or after that date until the day appointed under paragraph 3(2).

In this sub-paragraph “shares” means shares in a company or securities as defined in section 254(1) of the Taxes Act 1988 issued by a company.

(4)The provisions are—