Part III Income Tax, Corporation Tax and Capital Gains Tax
C1chapter II Unapproved Employee Share Schemes
Charges to tax
80 Charge on special benefits.
1
Subject to subsections (5) and (6) below, the person acquiring the shares or interest in shares shall be chargeable to tax if he receives a special benefit by virtue of his ownership of or interest in the shares.
F11A
If when a benefit is received the company is a dependent subsidiary and its shares are of a single class, the benefit is a special benefit for the purposes of subsection (1) above.
2
A benefit which does not fall within subsection (1A) above is a special benefit for the purposes of subsection (1) above unless—
a
when it becomes available it is available to at least ninety per cent. of the persons who then hold shares of the same class as those which, or an interest in which, the person acquired, and
b
any of the conditions in subsection (3) below is satisfied.
3
The conditions referred to in subsection (2) above are—
a
that when the benefit is received the majority of the company’s shares F2in respect of which the benefit is received are held otherwise than by or for the benefit of—
i
directors or employees of the company,
ii
an associated company of the company, or
iii
directors or employees of any such associated company;
b
that when the benefit is received the company is employee-controlled by virtue of holdings of shares of the class concerned;
c
that when the benefit is received the company is a subsidiary which is not a dependent subsidiary and F3the majority of its shares in respect of which the benefit is received are held otherwise than by or for the benefit of—.
i
directors or employees of the company,
ii
a company which is an associated company of the company but is not its parent company, or
iii
directors or employees of a company which is an associated company of the company
F43A
For the purposes of subsection (3)(c)(ii) above a company is another company’s parent company if the second company is a subsidiary of the first.
4
A charge by virtue of this section shall be a charge under Schedule E, for the year of assessment in which the benefit is received, on an amount equal to the value of the benefit.
5
Subsection (1) above shall apply only if the person receiving the benefit has been a director or employee of—
a
the company referred to in that subsection, or
b
(if it is different) the company as a director or employee of which he acquired the shares or interest, or
c
an associated company of a company within paragraph (a) or (b) above,
at some time during the period of seven years ending with the date on which the benefit is received.
6
A benefit shall not be chargeable by virtue of this section if it is chargeable to income tax apart from this section.
Pt. III Ch. II (ss. 77-89) applied (6.3.1992 with effect as mentioned in s. 289 of the applying Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 120(1), 289, (with ss. 60, 101(1), 171, 201(3))