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Valid from 28/07/2000
(1)In Chapter IV of Part V of the Taxes Act 1988 (provisions relating to the Schedule E charge: other exemptions and reliefs), after section 187 insert—
(1)Where a person (“the earner”) is chargeable to tax under section 135 on a gain, relief is available under this section if—
(a)an agreement has been entered into allowing the secondary contributor to recover from the earner the whole or part of any secondary Class 1 contributions in respect of the gain, or
(b)an election is in force which has the effect of transferring to the earner the whole or part of the liability to pay secondary Class 1 contributions in respect of the gain.
(2)The amount of the relief is the total of—
(a)any amount that, in pursuance of any such agreement as is mentioned in subsection (1)(a), is recovered in respect of the gain by the secondary contributor not later than 60 days after the end of the year of assessment in which occurred the event giving rise to the charge to tax under section 135; and
(b)the amount of any liability in respect of that gain that, by virtue of any such election as is mentioned in subsection (1)(b), has become the earner’s liability.
(3)Where notice of withdrawal of approval of any such election is given, relief under subsection (2)(b) is limited to so much of the earner’s liability in respect of the gain as is met before the end of the 60th day after the end of the year of assessment in which occurred the event giving rise to the charge under section 135.
(4)Relief under this section shall be given by way of deduction from the amount of the gain on which the earner is chargeable to tax under section 135.
(5)Any such deduction does not affect the amount of the gain for the purposes of—
(a)section 120(4) of the M1Taxation of Chargeable Gains Act 1992 (amount treated as consideration for acquisition of shares), or
(b)section 4(4)(a) of the Contributions and Benefits Act (amount treated as remuneration for contributions purposes).
(6)The agreements and elections referred to in this section are those having effect under paragraph 3A or 3B of Schedule 1 to the Contributions and Benefits Act.
References to approval in relation to an election are to approval by the Inland Revenue under paragraph 3B of that Schedule.
(7)In this section—
“the Contributions and Benefits Act” means the M2Social Security Contributions and Benefits Act 1992 or the M3Social Security Contributions and Benefits (Northern Ireland) Act 1992; and
“secondary Class 1 contributions” and “secondary contributor” have the same meaning as in that Act.”
Section 187A inserted by this subsection applies to any agreement or election having effect as mentioned in subsection (6) of that section, whether made before or after the passing of this Act.
(2)Section 203FB of the Taxes Act 1988 (PAYE: gains from share options) is amended as follows—
(a)in subsections (2) and (3), for “subsection (7)" substitute “ subsection (6A) ”;
(b)after subsection (6) insert—
“(6A)Where section 203F has effect in accordance with subsection (2) or (3) above, subsection (3) of section 203F shall apply as if the reference in that subsection to the amount of income likely to be chargeable to tax under Schedule E in respect of the provision of the asset were a reference to the amount on which tax is likely to be chargeable by virtue of section 135 in respect of the event in question, reduced by the amount of any relief likely to be available under section 187A.”;
(c)in subsection (7), for “any of the preceding provisions of this section" substitute “ subsection (4) or (5) above ” and for “section 135, 140A or 140D" substitute “ section 140A or 140D ”.
These amendments apply where the event giving rise to the charge to tax occurs after the passing of this Act.
(3)In section 136(6) of the Taxes Act 1988 and section 85(1) of the M4Finance Act 1988 (duty to deliver particulars relating to share options, etc. within 30 days after end of year of assessment), for “30 days" substitute “ 92 days ”.
These amendments apply where the event giving rise to the duty to deliver particulars occurs on or after 6th April 2000.
(4)After section 136(6) of the Taxes Act 1988 add—
“(7)A body corporate is not obliged to deliver particulars under subsection (6) above which it has already given in a notice under paragraph 2 of Schedule 14 to the Finance Act 2000 (enterprise management incentives: notice required for option to be qualifying option).
In other respects the obligations imposed by that subsection and that paragraph are independent of each other.
(8)The duty of a body corporate under subsection (6) above to deliver particulars of any matter includes a duty to deliver particulars of any secondary Class 1 contributions payable in connection with that matter that—
(a)are recovered as mentioned in section 187A(2)(a), or
(b)are met as mentioned in section 187A(3).
In this subsection “secondary Class 1 contributions” has the same meaning as in section 187A.”.
Section 136(8) inserted by this subsection applies to any amounts recovered or met as mentioned in section 187A(2)(a) or (3) of the Taxes Act 1988, whether before or after the passing of this Act.
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