Income Tax (Earnings and Pensions) Act 2003
Part 1Overview
1Overview of contents of this Act
2Abbreviations and general index in Schedule 1
Part 2Employment income: charge to tax
Chapter 1Introduction
3Structure of employment income Parts
4“Employment” for the purposes of the employment income Parts
5Application to offices and office-holders
Chapter 2Tax on employment income
6Nature of charge to tax on employment income
7Meaning of “employment income”, “general earnings” and “specific employment income”
8Meaning of “exempt income”
Chapter 3Operation of tax charge
9Amount of employment income charged to tax
10Meaning of “taxable earnings” and “taxable specific income”
11Calculation of “net taxable earnings”
12Calculation of “net taxable specific income”
13Person liable for tax
Chapter 4Taxable earnings: rules applying to employee resident, ordinarily resident and domiciled in UK
Taxable earnings
14Taxable earnings under this Chapter: introduction
Employees resident, ordinarily resident and domiciled in UK
15Earnings for year when employee resident, ordinarily resident and domiciled in UK
Year for which general earnings are earned
16Meaning of earnings “for” a tax year
17Treatment of earnings for year in which employment not held
When general earnings are received
18Receipt of money earnings
19Receipt of non-money earnings
Chapter 5Taxable earnings: rules applying to employee resident, ordinarily resident or domiciled outside UK
Taxable earnings
20Taxable earnings under this Chapter: introduction
Employees resident and ordinarily resident in UK
21Earnings for year when employee resident and ordinarily resident, but not domiciled, in UK, except chargeable overseas earnings
22Chargeable overseas earnings for year when employee resident and ordinarily resident, but not domiciled, in UK
23Calculation of “chargeable overseas earnings”
24Limit on chargeable overseas earnings where duties of associated employment performed in UK
Employees resident but not ordinarily resident in UK
25UK-based earnings for year when employee resident, but not ordinarily resident, in UK
26Foreign earnings for year when employee resident, but not ordinarily resident, in UK
Employees not resident in UK
27UK-based earnings for year when employee not resident in UK
Special class of earnings for purposes of sections 25 to 27
28Meaning of “general earnings from overseas Crown employment subject to UK tax”
Year for which general earnings are earned
29Meaning of earnings “for” a tax year
30Treatment of earnings for year in which employment not held
When general earnings are received or remitted
31Receipt of money earnings
32Receipt of non-money earnings
33Earnings remitted to UK
34Earnings remitted to UK: further provisions about UK-linked debts
Relief for delayed remittances
35Relief for delayed remittances
36Election in respect of delayed remittances
37Claims for relief on delayed remittances
Place of performance of duties of employment
38Earnings for period of absence from employment
39Duties in UK merely incidental to duties outside UK
40Duties on board vessel or aircraft
41Employment in UK sector of continental shelf
Chapter 6Disputes as to domicile or ordinary residence
42 Commissioners to determine dispute as to domicile or ordinary residence
43Appeal against Commissioners' decision on domicile or ordinary residence
Chapter 7Application of provisions to agency workers
Agency workers
44Treatment of workers supplied by agencies
45Arrangements with agencies
46Cases involving unincorporated bodies etc.
Supplementary
47Interpretation of this Chapter
Chapter 8Application of provisions to workers under arrangements made by intermediaries
Application of this Chapter
48Scope of this Chapter
49Engagements to which this Chapter applies
50Worker treated as receiving earnings from employment
51Conditions of liability where intermediary is a company
52Conditions of liability where intermediary is a partnership
53Conditions of liability where intermediary is an individual
The deemed employment payment
54Calculation of deemed employment payment
55Application of rules relating to earnings from employment
56Application of Income Tax Acts in relation to deemed employment
Supplementary provisions
57Earlier date of deemed employment payment in certain cases
58Relief in case of distributions by intermediary
59Provisions applicable to multiple intermediaries
60Meaning of “associate”
61Interpretation
Part 3Employment income: earnings and benefits etc. treated as earnings
Chapter 1Earnings
62Earnings
Chapter 2Taxable benefits: the benefits code
The benefits code
63The benefits code
64Relationship between earnings and benefits code
65Dispensations relating to benefits within provisions not applicable to lower-paid employment
General definitions for benefits code
66Meaning of “employment” and related expressions
67Meaning of “director” and “full-time working director”
68Meaning of “material interest” in a company
69Extended meaning of “control”
Chapter 3Taxable benefits: expenses payments
70Sums in respect of expenses
71Meaning of paid or put at disposal by reason of the employment
72Sums in respect of expenses treated as earnings
Chapter 4Taxable benefits: vouchers and credit-tokens
Cash vouchers: introduction
73Cash vouchers to which this Chapter applies
74Provision for, or receipt by, member of employee’s family
Meaning of “cash voucher”
75Meaning of “cash voucher”
76Sickness benefits-related voucher
77Apportionment of cost of provision of voucher
Cash vouchers: exceptions
78Voucher made available to public generally
79Voucher issued under approved scheme
80Vouchers where payment of sums exempt from tax
Benefit of cash voucher treated as earnings
81Benefit of cash voucher treated as earnings
Non-cash vouchers: introduction
82Non-cash vouchers to which this Chapter applies
83Provision for, or receipt by, member of employee’s family
Meaning of “non-cash voucher”
84Meaning of “non-cash voucher”
Non-cash voucher: exceptions
85Non-cash voucher made available to public generally
86Transport vouchers under pre-26th March 1982 arrangements
Benefit of non-cash voucher treated as earnings
87Benefit of non-cash voucher treated as earnings
88Year in which earnings treated as received
89Reduction for meal vouchers
Credit-tokens: introduction
90Credit-tokens to which this Chapter applies
91Provision for, or use by, member of employee’s family
Meaning of “credit-token”
92Meaning of “credit-token”
Credit-tokens: exception
93Credit-token made available to public generally
Benefit of credit-token treated as earnings
94Benefit of credit-token treated as earnings
General supplementary provisions
95Disregard for money, goods or services obtained
96Dispensations relating to vouchers or credit-tokens
Chapter 5Taxable benefits: living accommodation
Living accommodation
97Living accommodation to which this Chapter applies
Exceptions
98Accommodation provided by local authority
99Accommodation provided for performance of duties
100Accommodation provided as result of security threat
100AHomes outside UK owned through company etc
100BSection 100A(1): exceptions
101Chevening House
Benefit of living accommodation treated as earnings
102Benefit of living accommodation treated as earnings
Calculation of cash equivalent
103Method of calculating cash equivalent
104General rule for calculating cost of providing accommodation
Accommodation costing £75,000 or less
105Cash equivalent: cost of accommodation not over £75,000
Accommodation costing more than £75,000
106Cash equivalent: cost of accommodation over £75,000
107Special rule for calculating cost of providing accommodation
Apportionment of cash equivalent
108Cash equivalent: accommodation provided for more than one employee
Other tax implications
109Priority of this Chapter over Chapter 1 of this Part
Supplementary
110Meaning of “annual value”
111Disputes as to annual value
112Meaning of “person involved in providing the accommodation”
113Meaning of “the property”
Chapter 6Taxable benefits: cars, vans and related benefits
General
114Cars, vans and related benefits
115Meaning of “car” and “van”
116Meaning of when car or van is available to employee
117Meaning of car or van made available by reason of employment
118Availability for private use
119Where alternative to benefit of car or van offered
Cars: benefit treated as earnings
120Benefit of car treated as earnings
121Method of calculating the cash equivalent of the benefit of a car
Cars: the price of a car
122The price of the car
123The list price of a car
124The notional price of a car with no list price
Cars: treatment of accessories
125Meaning of “accessory” and related terms
126Amounts taken into account in respect of accessories
127The list price of an accessory
128Accessory: published price of the car manufacturer etc.
129Accessory: published price of the accessory manufacturer etc.
130The notional price of an accessory
131Replacement accessories
Cars: capital contributions by employee
132Capital contributions by employee
Cars: the appropriate percentage
133How to determine the “appropriate percentage”
134Meaning of car with or without a CO2 emissions figure
Cars: appropriate percentage: first registered on or after 1st January 1998
135Car with a CO2 emissions figure: pre-October 1999 registration
136Car with a CO2 emissions figure: post-September 1999 registration
137Car with a CO2 emissions figure: bi-fuel cars
138Car with a CO2 emissions figure: automatic car for a disabled employee
139Car with a CO2 emissions figure: the appropriate percentage
140Car without a CO2 emissions figure: the appropriate percentage
141Diesel cars: the appropriate percentage
Cars: appropriate percentage: first registered before 1st January 1998
142Car first registered before 1st January 1998: the appropriate percentage
Cars: unavailability or payments for private use
143Deduction for periods when car unavailable
144Deduction for payments for private use
145Modification of provisions where car temporarily replaced
Cars: special cases
146Cars that run on road fuel gas
147Classic cars: 15 years of age or more
Cars: reduction where shared car
148Reduction of cash equivalent where car is shared
Car fuel: benefit treated as earnings
149Benefit of car fuel treated as earnings
150Car fuel: calculating the cash equivalent
151Car fuel: nil cash equivalent
152Car fuel: proportionate reduction of cash equivalent
153Car fuel: reduction of cash equivalent
Vans: benefit treated as earnings
154Benefit of van treated as earnings
155Cash equivalent of the benefit of a van
Vans: reductions of cash equivalent
156Meaning of “shared van”
Reduction of cash equivalent where van is shared
157Reduction of cash equivalent where van is shared
Reduction for payments for private use
158Reduction for payments for private use
Modification of provisions where van temporarily replaced
159Modification of provisions where van temporarily replaced
Van fuel: benefit treated as earnings
160Benefit of van fuel treated as earnings
161Van fuel: the cash equivalent
162Van fuel: nil cash equivalent
163Van fuel: proportionate reduction of cash equivalent
164Van fuel: reduction of cash equivalent
Cars and vans: exceptions
167Pooled cars
168Pooled vans
169Car available to more than one member of family or household employed by same employer
169AVan available to more than one member of family or household employed by same employer
Orders
170Orders etc. relating to this Chapter
Supplementary
171Minor definitions: general
172Minor definitions: equipment to enable a disabled person to use a car
Chapter 7Taxable benefits: loans
Introduction
173Loans to which this Chapter applies
174Employment-related loans
Benefit of taxable cheap loan treated as earnings
175Benefit of taxable cheap loan treated as earnings
176Exception for loans on ordinary commercial terms
177Exceptions for loans at fixed rate of interest
178Exception for loans where interest qualifies for tax relief
179Exception for certain advances for necessary expenses
180Threshold for benefit of loan to be treated as earnings
Calculation of amount of interest at official rate
181The official rate of interest
182Normal method of calculation: averaging
183Alternative method of calculation
Supplementary provisions relating to taxable cheap loans
184Interest treated as paid
185Apportionment of cash equivalent in case of joint loan etc.
186Replacement loans
187Aggregation of loans by close company to director
Loan released or written off
188Loan released or written off: amount treated as earnings
189Exception where double charge
General supplementary provisions
190Exclusion of charge after death of employee
191Claim for relief to take account of event after assessment
Chapter 8Taxable benefits: notional loans in respect of acquisitions of shares
Introduction
192Application of this Chapter
Acquisition of shares for less than market value
193Notional loan where acquisition for less than market value
194The amount of the notional loan
195Discharge of notional loan: amount treated as earnings
Supplementary provisions
196Effects on other income tax charges
197Minor definitions
Chapter 9Taxable benefits: disposals of shares for more than market value
198Shares to which this Chapter applies
199Disposal for more than market value: amount treated as earnings
200Minor definitions
Chapter 10Taxable benefits: residual liability to charge
Introduction
201Employment-related benefits
202Excluded benefits
Cash equivalent of benefit treated as earnings
203Cash equivalent of benefit treated as earnings
Determination of the cost of the benefit
204Cost of the benefit: basic rule
205Cost of the benefit: asset made available without transfer
206Cost of the benefit: transfer of used or depreciated asset
Supplementary provisions
207Meaning of “annual rental value”
208Meaning of “market value”
209Meaning of “persons providing benefit”
210Power to exempt minor benefits
Special rules for scholarships
211Special rules for scholarships: introduction
212Scholarships provided under arrangements entered into by employer or connected person
213Exception for certain scholarships under trusts or schemes
214Scholarships: cost of the benefit
215Limitation of exemption for scholarship income in section 331 of ICTA
Chapter 11Taxable benefits: exclusion of lower-paid employments from parts of benefits code
Introduction
216Provisions not applicable to lower-paid employments
What is lower-paid employment
217Meaning of “lower-paid employment”
218Calculation of earnings rate for a tax year
219Extra amounts to be added in connection with a car
Treatment of related employments
220Related employments
Chapter 12Payments treated as earnings
221Payments where employee absent because of sickness or disability
222Payments by employer on account of tax where deduction not possible
223Payments on account of director’s tax other than by the director
224Payments to non-approved personal pension arrangements
225Payments for restrictive undertakings
226Valuable consideration given for restrictive undertakings
Part 4Employment income: exemptions
Chapter 1Exemptions: general
227Scope of Part 4
228Effect of exemptions on liability under provisions outside Part 2
Chapter 2Exemptions: mileage allowances and passenger payments
Mileage allowances
229Mileage allowance payments
230The approved amount for mileage allowance payments
231Mileage allowance relief
232Giving effect to mileage allowance relief
Passenger payments
233Passenger payments
234The approved amount for passenger payments
Supplementary
235Vehicles to which this Chapter applies
236Interpretation of this Chapter
Chapter 3Exemptions: other transport, travel and subsistence
237Parking provision and expenses
238Modest private use of heavy goods vehicles
239Payments and benefits connected with taxable cars and vans and exempt heavy goods vehicles
240Incidental overnight expenses and benefits
241Incidental overnight expenses and benefits: overall exemption limit
242Works transport services
243Support for public bus services
244Cycles and cyclist’s safety equipment
245Travelling and subsistence during public transport strikes
246Transport between work and home for disabled employees: general
247Provision of cars for disabled employees
248Transport home: late night working and failure of car-sharing arrangements
248AEmergency vehicles
249Interpretation of this Chapter
Chapter 4Exemptions: education and training
Work-related training
250Exemption of work-related training provision
251Meaning of “work-related training”
252Exception for non-deductible travel expenses
253Exception where provision for excluded purposes
254Exception where unrelated assets are provided
Individual learning account training
255Exemption for contributions to individual learning account training
256Meaning of “individual learning account training”
257Exception for non-deductible travel expenses
258Exception where provision for excluded purposes
259Exception where unrelated assets are provided
260Exception where training not generally available to staff
Chapter 5Exemptions: recreational benefits
Recreational facilities
261Exemption of recreational benefits
262Benefits not exempted by section 261
263Power to alter benefits to which section 261 applies
Annual parties and functions
264Annual parties and functions
Entertainment
265Third party entertainment
Chapter 6Exemptions: non-cash vouchers and credit-tokens
General exemptions: use for exempt benefits
266Exemption of non-cash vouchers for exempt benefits
267Exemption of credit-tokens used for exempt benefits
Exemptions for particular non-cash vouchers and credit-tokens
268Exemption of vouchers and tokens for incidental overnight expenses
269Exemption where benefits or money obtained in connection with taxable car or van or exempt heavy goods vehicle
270Exemption for small gifts of vouchers and tokens from third parties
270ALimited exemption for qualifying childcare vouchers
Chapter 7Exemptions: removal benefits and expenses
Exemption of removal benefits and expenses: general
271Limited exemption of removal benefits and expenses: general
272Removal benefits and expenses to which section 271 applies
273Conditions applicable to change of residence
274Meaning of “the limitation day”
275Meaning of “the employment change”
276Meaning of “residence”, “former residence” and “new residence” etc.
Benefits and expenses within this Chapter
277Acquisition benefits and expenses
278Abortive acquisition benefits and expenses
279Disposal benefits and expenses
280Transporting belongings
281Travelling and subsistence
282Exclusion from section 281 of benefits and expenses where deduction allowed
283Exclusion from section 281 of taxable car and van facilities
284Bridging loan expenses
285Replacement of domestic goods
286Power to amend sections 277 to 285
Limit on exemption
287Limit on exemption
Special exemption and relief for bridging loans
288Limited exemption of certain bridging loans connected with employment moves
289Relief for certain bridging loans not qualifying for exemption under section 288
Chapter 8Exemptions: special kinds of employees
Ministers of religion
290Accommodation benefits of ministers of religion
MPs, government ministers etc.
291Termination payments to MPs and others ceasing to hold office
292Overnight expenses allowances of MPs
293Overnight expenses of other elected representatives
294European travel expenses of MPs and other representatives
295Transport and subsistence for Government ministers etc.
Armed forces
296Armed forces' leave travel facilities
297Armed forces' food, drink and mess allowances
298Reserve and auxiliary forces' training allowances
Crown employees
299Crown employees' foreign service allowances
Consuls, foreign agents etc.
300Consuls
301Official agents
302Consular employees
Visiting forces and staff of designated allied headquarters
303Visiting forces and staff of designated allied headquarters
Detached national experts
304Experts seconded to European Commission
Offshore oil and gas workers
305Offshore oil and gas workers: mainland transfers
Miners etc.
306Miners etc: coal and allowances in lieu of coal
Chapter 9Exemptions: pension provision
307Death or retirement benefit provision
308Exemption of contributions to registered pension scheme
308AExemption of contributions to overseas pension scheme
Chapter 10Exemptions: termination of employment
Redundancy payments
309Limited exemptions for statutory redundancy payments
Outplacement benefits
310Counselling and other outplacement services
311Retraining courses
312Recovery of tax
Chapter 11Miscellaneous exemptions
Living accommodation
313Repairs and alterations to living accommodation
314Council tax etc. paid for certain living accommodation
315Limited exemption for expenses connected with certain living accommodation
Work accommodation, supplies etc.
316Accommodation, supplies and services used in employment duties
316AHomeworker’s additional household expenses
Workplace meals
317Subsidised meals
Childcare
318Childcare: exemption for employer-provided care
318AChildcare: limited exemption for other care
318BChildcare: meaning of “care”, “child” and “parental responsibility”
318CChildcare: meaning of “qualifying child care”
318DChildcare: power to vary exempt amount and qualifying conditions
Telephones and computer equipment
319Mobile telephones
320Limited exemption for computer equipment
Awards and gifts
321Suggestion awards
322Suggestion awards: “the permitted maximum”
323Long service awards
324Small gifts from third parties
Overseas medical treatment
325Overseas medical treatment
325AHealth and employment insurance payments
Expenses incidental to sale etc. of asset
326Expenses incidental to transfer of a kind not normally met by transferor
Part 5Employment income: deductions allowed from earnings
Chapter 1Deductions allowed from earnings: general rules
Introduction
327Deductions from earnings: general
General rules
328The income from which deductions may be made
329Deductions from earnings not to exceed earnings
330Prevention of double deductions
331Order for making deductions
332Meaning of “the deductibility provisions”
Chapter 2Deductions for employee’s expenses
Introduction
333Scope of this Chapter: expenses paid by the employee
334Effect of reimbursement etc.
335Application of deductions provisions: “earnings charged on receipt” and “earnings charged on remittance”
General rule for deduction of employee’s expenses
336Deductions for expenses: the general rule
Travel expenses
337Travel in performance of duties
338Travel for necessary attendance
339Meaning of “workplace” and “permanent workplace”
340Travel between group employments
341Travel at start or finish of overseas employment
342Travel between employments where duties performed abroad
Fees and subscriptions
343Deduction for professional membership fees
344Deduction for annual subscriptions
345Decisions of an officer of Revenue and Customs under section 344
Employee liabilities and indemnity insurance
346Deduction for employee liabilities
347Payments made after leaving the employment
348Liabilities related to the employment
349Meaning of “qualifying insurance contract”
350Connected contracts
Expenses of ministers of religion
351Expenses of ministers of religion
Agency fees paid by entertainers
352Limited deduction for agency fees paid by entertainers
Special rules for earnings with a foreign element
353Deductions from earnings charged on remittance
354Disallowance of expenses relating to earnings taxed on different basis or untaxed
355Deductions for corresponding payments by non-domiciled employees with foreign employers
Disallowance of business entertainment and gifts expenses
356Disallowance of business entertainment and gifts expenses
357Business entertainment and gifts: exception where employer’s expenses disallowed
358Business entertainment and gifts: other exceptions
Other rules preventing deductions of particular kinds
359Disallowance of travel expenses: mileage allowances and reliefs
360Disallowance of certain accommodation expenses of MPs and other representatives
360ASocial security contributions
Chapter 3Deductions from benefits code earnings
Introduction
361Scope of this Chapter: cost of benefits deductible as if paid by employee
Deductions where amounts treated as earnings under the benefits code
362Deductions where non-cash voucher provided
363Deductions where credit-token provided
364Deductions where living accommodation provided
365Deductions where employment-related benefit provided
Chapter 4Fixed allowances for employee’s expenses
Introduction
366Scope of this Chapter: amounts fixed by Treasury
Fixed sum deductions
367Fixed sum deductions for repairing and maintaining work equipment
368Fixed sum deductions from earnings payable out of public revenue
Chapter 5Deductions for earnings representing benefits or reimbursed expenses
Introduction
369Scope of this Chapter: earnings representing benefits or reimbursed expenses
Travel costs and expenses where duties performed abroad
370Travel costs and expenses where duties performed abroad: employee’s travel
371Travel costs and expenses where duties performed abroad: visiting spouse’s , civil partner's or child’s travel
372Where seafarers' duties are performed
Travel costs and expenses of non-domiciled employees where duties performed in UK
373Non-domiciled employee’s travel costs and expenses where duties performed in UK
374Non-domiciled employee’s spouse’s , civil partner's or child’s travel costs and expenses where duties performed in UK
375Meaning of “qualifying arrival date”
Foreign accommodation and subsistence costs and expenses
376Foreign accommodation and subsistence costs and expenses (overseas employments)
Personal security assets and services
377Costs and expenses in respect of personal security assets and services
Chapter 6Deductions from seafarers' earnings
378Deduction from seafarers' earnings: eligibility
379Calculating the deduction
380Limit on deduction where UK duties etc. make amount unreasonable
381Taking account of other deductions
382Duties on board ship
383Place of performance of incidental duties
384Meaning of employment “as a seafarer”
385Meaning of “ship”
Part 6Employment income: income which is not earnings or share-related
Chapter 1Payments to non-approved pension schemes
386Charge on payments to non-approved retirement benefits schemes
387Meaning of “non-approved retirement benefits scheme”
388Apportionment of payments in respect of more than one employee
389Exception: employments where earnings charged on remittance
390Exception: non-domiciled employees with foreign employers
391Exception: seafarers with overseas earnings
392Relief where no benefits are paid or payable
Chapter 2Benefits from employer-financed retirement benefits
Benefits treated as employment income
393Application of this Chapter
393AEmployer-financed retirement benefits scheme
393BRelevant benefits
394Charge on benefit to which this Chapter applies
395Reduction where employee has contributed
396Certain lump sums not taxed by virtue of section 394
397Certain lump sums: calculation of amount taxed by virtue of section 394
Valuation of benefits etc.
398Valuation of benefits
399Employment-related loans: interest treated as paid
Interpretation
399AResponsible person
400Interpretation
Chapter 3Payments and benefits on termination of employment etc.
Preliminary
401Application of this Chapter
402Meaning of “benefit”
Payments and benefits treated as employment income
403Charge on payment or other benefit
404How the £30,000 threshold applies
Exceptions and reductions
405Exception for certain payments exempted when received as earnings
406Exception for death or disability payments and benefits
407Exception for payments and benefits under tax-exempt pension schemes
408Exception for contributions to registered pension schemes
409Exception for payments and benefits in respect of employee liabilities and indemnity insurance
410Exception for payments and benefits in respect of employee liabilities and indemnity insurance: individual deceased
411Exception for payments and benefits for forces
412Exception for payments and benefits provided by foreign governments etc.
413Exception in certain cases of foreign service
414Reduction in other cases of foreign service
General and supplementary provisions
415Valuation of benefits
416Notional interest treated as paid if amount charged for beneficial loan
Part 7Employment income: income and exemptions relating to securities
Chapter 1Introduction
General
417Scope of Part 7
418Other related provisions
419Negative amounts treated as nil
Interpretation of Chapters 1 to 5
420Meaning of “securities” etc
421Meaning of “market value” etc
421AMeaning of “consideration”
Application of Chapters 2 to 4A
421BApplication of Chapters 2 to 4A
421CAssociated persons
421DReplacement and additional securities and changes in interests
421EExclusions: residence etc
421FExclusions: public offers
421GExclusions: approved plan or scheme securities
421HMeaning of “employee-controlled” etc
421IConsideration for acquisition of employment-related securities
Information
421JDuty to provide information
421KReportable events
421LPersons to whom section 421J applies
Chapter 2Restricted securities
Introduction
422Application of this Chapter
423“Restricted securities” and “restricted interest in securities”
424Exceptions
Tax exemption on acquisition
425No charge in respect of acquisition in certain cases
Tax charge on post-acquisition chargeable events
426Charge on occurrence of chargeable event
427Chargeable events
428Amount of charge
428ARelief for secondary Class 1 contributions met by employee
429Case outside charge under section 426
430Election for outstanding restrictions to be ignored
431Election for full or partial disapplication of this Chapter
431AShares under approved plan or scheme
431BSecurities acquired for purpose of avoidance
432Definitions
Chapter 3Convertible securities
Introduction
435Application of this Chapter
436“Convertible securities”
Tax relief on acquisition
437Adjustment of charge
Tax charge on post-acquisition chargeable events
438Charge on occurrence of chargeable event
439Chargeable events
440Amount of charge
441Amount of gain realised on occurrence of chargeable event
442Amount of consideration given for entitlement to convert
442ARelief for secondary Class 1 contributions met by employee
443Case outside charge under section 438
Supplementary
444Definitions
Chapter 3ASecurities with artificially depressed market value
Introduction
446AApplication of this Chapter
Tax charge on acquisition
446BCharge on acquisition
446CAmount of charge
446DRestricted securities and convertible securities
Other tax charges
446ECharge on restricted securities
446FAdjustment of market value: conditional interests
446GAdjustment of market value: consideration for entitlement to convert
446HAdjustment of market value: charge on conversion
446IAdjustment of consideration or benefit received
446IADisapplication of exceptions from charges
Supplementary
446JDefinitions
Chapter 3BSecurities with artificially enhanced market value
Introduction
446KApplication of this Chapter
Charge on non-commercial increases
446LCharge on non-commercial increases
446MSecurities subject to restriction on valuation date
446NSecurities subject to restriction during relevant period
446NADisapplication of exceptions from charges
Supplementary
446O“Relevant period” and “valuation date”
446PDefinitions
Chapter 3CSecurities acquired for less than market value
446QApplication of this Chapter
446RCase outside this Chapter
446SNotional loan
446TAmount of notional loan
446UDischarge of notional loan
446UAPre-acquisition avoidance cases
446VChapter to be additional to other income tax charges
446WDefinitions
Chapter 3DSecurities disposed of for more than market value
446XApplication of this Chapter
446YAmount treated as income
446ZDefinitions
Chapter 4Post-acquisition benefits from securities
447Charge on other chargeable benefits from securities
448Amount of charge
449Case outside this Chapter
450Definitions
Tax charge where restrictions or rights varied
451Amount of charge
452Cases outside charge under section 449
Tax charge on increase in value of shares of dependent subsidiaries
453Charge on increase in value of shares of dependent subsidiary
454Chargeable increases
455Amount of charge
456Cases outside charge under section 453
Tax charge on other benefits from shares
457Charge on other chargeable benefits from shares
458Chargeable benefits
459Amount of charge
460Cases outside charge under section 457
Supplementary provisions
461Related acquisitions of additional shares
462Company reorganisations etc.
463Disposals of shares to connected persons etc. ignored
464Application to interests in shares
465Duty to notify acquisitions of shares or interests in shares
466Duty to notify chargeable events and chargeable benefits
Interpretation
467Meaning of “dependent subsidiary”
468Meaning of “employee-controlled”
469Shares “held by outside shareholders”
470Minor definitions
Chapter 4AShares in research institution spin-out companies
Introduction
451Application of this Chapter
Tax relief on acquisition
452Market value on acquisition
Tax relief following acquisition
453Taxable amount under Chapter 4
Disapplication of Chapters 2 and 3B
454Deemed election for disapplication of Chapter 2
455Disapplication of Chapter 3B
Supplementary
456Meaning of “intellectual property” and “transfer”
457Meaning of “research institution”
458Meaning of “involved in research”
459Transfer of intellectual property by controlled company
460Definitions
Chapter 5Securities options
Introduction
471Options to which this Chapter applies
472Associated persons
473Introduction to taxation of securities options
474Cases where this Chapter does not apply
Tax relief on acquisition of option
475No charge in respect of acquisition of option
Tax charge on post-acquisition chargeable events
476Charge on occurrence of chargeable event
477Chargeable events
478Amount of charge
479Amount of gain realised on occurrence of chargeable event
480Deductible amounts
481 Relief for secondary Class 1 contributions met by employee
482 Relief for special contribution met by employee
Supplementary provisions
483Application of this Chapter where option exchanged for another
484Definitions
Supplementary provisions
485Application of this Chapter where share option exchanged for another
486Duty to notify matters relating to share options
487Minor definitions
Chapter 6Approved share incentive plans
Introduction
488Approved share incentive plans (SIPs)
Scope of tax advantages
489Operation of tax advantages in connection with approved SIP
Tax advantages connected with award of shares
490No charge on award or acquisition of shares: general
491No charge on award of shares as taxable benefit
492No charge on partnership share money deducted from salary
493No charge on acquisition of dividend shares
Tax advantages connected with holding of shares
494No charge on removal of restrictions applying to shares
495No charge on increase in value of shares of dependent subsidiary
496No charge on cash dividend retained for reinvestment
Tax advantages connected with shares ceasing to be subject to plan
497Limitations on charges on shares ceasing to be subject to plan
498No charge on shares ceasing to be subject to plan in certain circumstances
Tax advantages: supplementary
499No charge in respect of incidental expenditure
Scope of tax charges
500Operation of tax charges in connection with approved SIP
Charges connected with holding of shares
501Charge on capital receipts in respect of plan shares
502Meaning of “capital receipt” in section 501
503Charge on partnership share money paid over to employee
504Charge on cancellation payments in respect of partnership share agreement
Charges connected with shares ceasing to be subject to plan
505Charge on free or matching shares ceasing to be subject to plan
506Charge on partnership shares ceasing to be subject to plan
507Charge on disposal of beneficial interest during holding period
508Identification of shares ceasing to be subject to plan
PAYE
509Modification of section 696 where charge on shares ceasing to be subject to plan
510Payments by trustees to employer company on shares ceasing to be subject to plan
511PAYE deductions to be made by trustees on shares ceasing to be subject to plan
512Disposal of beneficial interest by participant
513Capital receipts: payments by trustees to employer company
514Capital receipts: PAYE deductions to be made by trustees
Other tax consequences
515Tax advantages and charges under other Acts
Chapter 7Approved SAYE option schemes
Introduction
516Approved SAYE option schemes
517Share options to which this Chapter applies
Tax advantages
518No charge in respect of receipt of option
519No charge in respect of exercise of option
520No charge in respect of post-acquisition benefits
Chapter 8Approved CSOP schemes
Introduction
521Approved CSOP schemes
522Share options to which this Chapter applies
Tax advantages
523No charge in respect of receipt of option
524No charge in respect of receipt of option
525No charge in respect of post-acquisition benefits
Tax charge
526Charge where option granted at a discount
Chapter 9Enterprise management incentives
Introduction
527Enterprise management incentives: qualifying options
Tax advantages: receipt of option
528No charge on receipt of qualifying option
Tax advantages: exercise of option
529Scope of tax advantages: option must be exercised within 10 years
530No charge on exercise of option to acquire shares at market value
531Limitation of charge on exercise of option to acquire shares below market value
Tax advantages where disqualifying events
532Modified tax consequences following disqualifying events
533Disqualifying events
534Disqualifying events relating to relevant company
535Disqualifying events relating to employee
536Other disqualifying events
537Alterations of share capital for purposes of section 536
538Share conversions excluded for purposes of section 536
539CSOP and other options relevant for purposes of section 536
Tax advantages: taxable benefits
540No charge on acquisition of shares as taxable benefit
Other income tax consequences
541Effects on other income tax charges
Chapter 10Priority share allocations
Exemption where offer made to both public and employees
542Exemption: offer made to public and employees
543Discount not covered by exemption in section 542
Exemption where different offers made to public and employees
544Exemption: different offers made to public and employees
545Discount not covered by exemption in section 544
Supplementary provisions
546Meaning of being entitled “on similar terms”
547Meaning and amount or value of “registrant discount”
548Minor definitions
Chapter 11Supplementary provisions about employee benefit trusts
Introduction
549Application of this Chapter
Employee benefit trusts
550Meaning of “employee benefit trust”
551“Qualifying disposals” for purposes of section 550
Attribution of interests in company
552Attribution of interest in company to beneficiary or associate
553Meaning of “appropriate percentage” for purposes of section 552
554Attribution of further interest in company
Part 8Former employees: deductions for liabilities
Deductions from total income
555Former employee entitled to deduction from total income
556Deductible payments made outside the time limits allowed
557Deductible payments wholly or partly borne by the former employer etc.
Interpretation
558Meaning of “deductible payment”
559Liabilities related to the former employment
560Meaning of “qualifying insurance contract”
561Connected contracts
562Meaning of “former employee” and “employment”
563Other interpretation
564Application of this Part to office-holders
Part 9Pension income
Chapter 1Introduction
565Structure of Part 9
Chapter 2Tax on pension income
566Nature of charge to tax on pension income and relevant definitions
567Amount charged to tax
568Person liable for tax
Chapter 3United Kingdom pensions: general rules
569United Kingdom pensions
570“Pension”: interpretation
571Taxable pension income
572Person liable for tax
Chapter 4Foreign pensions: general rules
573Foreign pensions
574“Pension”: interpretation
575Taxable pension income
576Person liable for tax
Chapter 5United Kingdom social security pensions
577United Kingdom social security pensions
578Taxable pension income
579Person liable for tax
Chapter 5APENSIONS UNDER REGISTERED PENSION SCHEMES
579APensions
579BTaxable pension income
579CPerson liable for tax
579DInterpretation
Chapter 6Approved retirement benefits schemes
Pensions and annuities
580Pensions and annuities
581Taxable pension income
582Person liable for tax
Unauthorised payments
583Unauthorised payments
584Taxable pension income
585Person liable for tax
Interpretation etc.
586Meaning of “retirement benefits scheme” etc.
587Application to marine pilots' benefit fund
588Meaning of “employee” , “former civil partner and “ex-spouse”
589Regulations
Chapter 7Former approved superannuation funds
Annuities
590Annuities
591Taxable pension income
592Person liable for tax
Unauthorised payments
593Unauthorised payments: application of section 583
Interpretation
594Meaning of “former approved superannuation fund”
Chapter 8Approved personal pension schemes
Annuities
595Annuities
596Taxable pension income
597Person liable for tax
Income withdrawals
598Income withdrawals
599Taxable pension income
600Person liable for tax
Unauthorised personal pension payments
601Unauthorised personal pension payments
602Taxable pension income
603Person liable for tax
Interpretation
604Meaning of “personal pension scheme” and related expressions
Chapter 9Retirement annuity contracts
605Annuities
606Meaning of “retirement annuity contract”
607Taxable pension income
608Person liable for tax
Chapter 10Other employment-related annuities
609Annuities for the benefit of dependants
610Annuities under non-registered occupational pension schemes
611Annuities in recognition of another’s services
612Taxable pension income: UK annuities
613Taxable pension income: foreign annuities
614Person liable for tax
Chapter 11Certain overseas government pensions paid in the UK
615Certain overseas government pensions paid in the United Kingdom
616Taxable pension income
617Deduction allowed from taxable pension income
618Person liable for tax
Chapter 12House of Commons Members' Fund
619The House of Commons Members' Fund
620Meaning of “House of Commons Members' Fund”
621Taxable pension income
622Person liable for tax
Chapter 13Return of surplus employee additional voluntary contributions
623Return of surplus employee additional voluntary contributions
624Taxable pension income
625Person liable for tax
626Income tax treated as paid
627Meaning of “grossing up”
628Interpretation
Chapter 14Pre-1973 pensions paid under the Overseas Pensions Act 1973
629Pre-1973 pensions paid under the Overseas Pensions Act 1973
630Interpretation
631Taxable pension income
632Person liable for tax
Chapter 15Voluntary annual payments
633Voluntary annual payments
634Taxable pension income: UK voluntary annual payments
635Taxable pension income: foreign voluntary annual payments
636Person liable for tax
CHAPTER 15ALUMP SUMS UNDER REGISTERED PENSION SCHEMES
636AExemption for certain lump sums under registered pension schemes
636BTrivial commutation and winding-up lump sums
636CTrivial commutation and winding-up lump sum death benefits
Chapter 16Exemption for certain lump sums
637Exemption for lump sums provided under certain pension schemes etc.
Chapter 17Exemptions: any taxpayer
638Awards for bravery
639Pensions in respect of death due to military or war service
640Exemption under section 639 where income withheld
640ALump sums provided under armed forces early departure scheme
641Wounds and disability pensions
642Compensation for National-Socialist persecution
643Malawi, Trinidad and Tobago and Zambia government pensions
644Pensions payable where employment ceased due to disablement
644AHealth and employment insurance payments
645Social security pensions: increases in respect of children
646Former miners etc: coal and allowances in lieu of coal
646AForeign pensions of consular employees
Chapter 18Exemptions: Non-UK resident taxpayers
647Introduction and meaning of “foreign residence condition” etc.
648The Central African Pension Fund
649Commonwealth government pensions
650Oversea Superannuation Scheme
651Overseas Pensions Act 1973
652Overseas Service Act 1958
653Overseas Service Pensions Fund
654The Pensions (India, Pakistan and Burma) Act 1955
Part 10Social security income
Chapter 1Introduction
655Structure of Part 10
Chapter 2Tax on social security income
656Nature of charge to tax on social security income
657Meaning of “social security income”, “taxable benefits” etc.
658Amount charged to tax
659Person liable for tax
Chapter 3Taxable UK social security benefits
660Taxable benefits: UK benefits – Table A
661Taxable social security income
662Person liable for tax
Chapter 4Taxable UK social security benefits: exemptions
Incapacity benefit
663Long-term incapacity benefit: previous entitlement to invalidity benefit
664Short-term incapacity benefit not payable at the higher rate
Income support
665Exempt unless payable to member of couple involved in trade dispute
666Child maintenance bonus
667Amounts in excess of taxable maximum
668Taxable maximum
669Interpretation
Jobseeker’s allowance
670Child maintenance bonus
671Amounts in excess of taxable maximum
672Taxable maximum: general
673Taxable maximum: income-based jobseeker’s allowance
674Taxable maximum: contribution-based jobseeker’s allowance
675Interpretation
Increases in respect of children
676Increases in respect of children
Chapter 5UK social security benefits wholly exempt from income tax
677UK social security benefits wholly exempt from tax: Table B
Chapter 6Taxable foreign benefits
678Taxable benefits: foreign benefits
679Taxable social security income
680Person liable for tax
Chapter 7Taxable and other foreign benefits: exemptions
681Taxable and other foreign benefits: exemptions
681AForeign benefits of consular employees
Part 11Pay As You Earn
Chapter 1Introduction
682Scope of this Part
683PAYE income
Chapter 2PAYE: general
684PAYE regulations
685Tax tables
686Meaning of “payment”
Chapter 3PAYE: special types of payer or payee
687Payments by intermediary
688Agency workers
689Employee of non-UK employer
690Employee non-resident etc.
691Mobile UK workforce
692Organised arrangements for sharing tips
Chapter 4PAYE: special types of income
Income provided by means of vouchers and tokens
693Cash vouchers
694Non-cash vouchers
695Credit-tokens
Income provided in other ways
696Readily convertible assets
697Enhancing the value of an asset
698PAYE: special charges on employment-related securities
699PAYE: conversion of shares
700PAYE: gains from securities options
Supplemental
701Meaning of “asset”
702Meaning of “readily convertible asset”
Chapter 5PAYE settlement agreements
703Introduction
704Sums payable by employers under agreements
705Approximations allowed in calculations
706Exclusion of general earnings from income etc.
707Interpretation of this Chapter
Chapter 6Miscellaneous and supplemental
708PAYE repayments
709Additional provision for certain assessments
710Notional payments: accounting for tax
711Right to make a return
712Interpretation of this Part
Part 12Payroll giving
713Donations to charity: payroll deduction scheme
714Meaning of “donations”
715Approval of schemes: regulation by Treasury
Part 13Supplementary provisions
Alteration of amounts
716Alteration of amounts by Treasury order
Priority rule for certain dividends etc
716APriority rule for dividends etc. of UK resident companies etc.
Orders and regulations
717Orders and regulations made by Treasury or Commissioners
Interpretation
718Connected persons
719Control in relation to a body corporate
720Meaning of “ an officer of Revenue and Customs ” etc.
721Other definitions
Amendments, repeals, citation etc.
722Consequential amendments
723Commencement and transitional provisions and savings
724Repeals and revocations
725Citation
SCHEDULES
SCHEDULE 1Abbreviations and defined expressions
Part 1Abbreviations of Acts and instruments
Part 2Index of expressions defined in this Act or ICTA
SCHEDULE 2Approved share incentive plans
Part 1Introduction
Approval of share incentive plans (SIPs)
1(1) This Schedule makes provision for— (a) the approval of...
SIPs: free shares and partnership shares
2(1) In the SIP code a “share incentive plan” (or...
Matching shares
3(1) A SIP that provides for partnership shares may also...
Group plans
4(1) A SIP established by a company that controls other...
Meaning of “award of shares”, “participant” etc.
5(1) For the purposes of the SIP code an “award...
Part 2General requirements
General requirements for approval: introduction
6A SIP must meet the plan requirements contained in— paragraph...
The purpose of the plan
7(1) The purpose of the plan must be to provide...
All-employee nature of plan
8(1) The plan must provide that every employee who—
Participation on same terms
9(1) The requirement of this paragraph is that—
No preferential treatment for directors and senior employees
10(1) The first requirement of this paragraph is that no...
No further conditions
11No conditions apart from those required or authorised by this...
No loan arrangements
12(1) The arrangements for the plan must not make any...
Part 3Eligibility of individuals
Eligibility of individuals: introduction
13A SIP must meet the plan requirements contained in— paragraph...
Time of eligibility to participate
14(1) The plan must provide that an individual may only...
The employment requirement
15(1) The plan must provide that an individual is not...
Qualifying periods
16(1) This paragraph applies if the plan provides for a...
Meaning of “qualifying company”
17(1) For the purposes of paragraph 15(2) “qualifying company” has...
Requirement not to participate in other SIPs
18(1) The plan must provide that an individual is not...
Participation in more than one connected SIP in a tax year
18A(1) The plan must provide that, if an individual participates...
The “no material interest” requirement
19(1) The plan must provide that an individual is not...
Meaning of “material interest”
20(1) In paragraph 19 (the “no material interest” requirement) references...
Material interest: options and interests in SIPs
21(1) This paragraph applies for the purposes of paragraph 20...
Meaning of “associate”
22(1) In paragraph 19(2) (the “no material interest” requirement) “associate”,...
Meaning of “associate”: trustees of employee benefit trust
23(1) This paragraph applies for the purposes of paragraph 22(1)(c)...
Meaning of “associate”: trustees of discretionary trust
24(1) This paragraph applies for the purposes of paragraph 22(1)(c)...
Part 4Types of shares that may be awarded
Types of share that may be awarded: introduction
25(1) The requirements of the following paragraphs must be met...
Shares must be part of ordinary share capital of certain companies
26Eligible shares must form part of the ordinary share capital...
Requirement as to listing etc.
27(1) Eligible shares must be— (a) shares of a class...
Shares must be fully paid up and not redeemable
28(1) Eligible shares must be— (a) fully paid up, and...
Prohibited shares
29(1) Eligible shares must not be shares in—
Only certain kinds of restriction allowed
30(1) Eligible shares must not be subject to any restrictions...
Permitted restrictions: voting rights
31Eligible shares may be shares carrying no voting rights or...
Permitted restrictions: provision for forfeiture
32(1) Free or matching shares may be subject to provision...
Permitted restrictions: pre-emption conditions
33(1) If the requirements of this paragraph are met, eligible...
Part 5Free shares
Free shares: introduction
34(1) If a SIP provides for free shares, it must...
Maximum annual award
35(1) The plan must provide that the initial market value...
The holding period
36(1) The plan must require the company in respect of...
Holding period: power of participant to direct trustees to accept general offers etc.
37(1) A participant may direct the trustees to do any...
Performance allowances: general application
38A plan that provides for performance allowances in relation to...
Performance allowances: targets and measures
39(1) A plan that provides for performance allowances must comply...
Performance allowances: information to be given to employees
40(1) A plan that provides for performance allowances in relation...
Performance allowances: method one
41(1) The requirements of this paragraph are those contained in...
Performance allowances: method two
42(1) The requirements of this paragraph are those contained in...
Part 6Partnership shares
Partnership shares: introduction
43(1) If a SIP provides for partnership shares, the following...
Partnership share agreements
44(1) The plan must provide for qualifying employees to enter...
Deductions from salary
45(1) The plan must provide for a partnership share agreement...
Maximum amount of deductions
46(1) The amount of partnership share money deducted from an...
Minimum amount of deductions
47(1) The plan may provide that the amount to be...
Notice of possible effect of deductions on benefit entitlement
48(1) The plan must provide that the company may not...
Partnership share money held for employee
49(1) The plan must provide that partnership share money deducted...
Application of money deducted where no accumulation periods
50(1) If the plan does not provide for an accumulation...
Accumulation periods
51(1) The plan may provide for accumulation periods not exceeding...
Application of money deducted in accumulation period
52(1) This paragraph applies if the plan provides for one...
Restriction on number of shares awarded
53(1) The plan may authorise the company to specify the...
Stopping and re-starting deductions
54(1) The plan must provide that an employee may at...
Withdrawal from partnership share agreement
55(1) The plan must provide that an employee may at...
Repayment of partnership share money on withdrawal of approval or termination
56(1) The plan must provide that, where the approval of...
Access to partnership shares
57(1) The plan must provide that when partnership shares have...
Part 7Matching shares
Matching shares: introduction
58If a SIP provides for matching shares it must meet...
General requirements for matching shares
59(1) The plan must provide for the matching shares to...
Ratio of matching shares to partnership shares
60(1) The partnership share agreement must specify—
Holding period for matching shares
61Paragraphs 36 and 37 (the holding period and related matters)...
Part 8Cash dividends and dividend shares
Reinvestment of cash dividends
62(1) A SIP may provide that, where the company so...
Requirements to be met as regards cash dividends
63(1) If a SIP makes the provision authorised by paragraph...
Limit on amount reinvested
64(1) The plan must provide that the total dividend reinvestment...
General requirements as to dividend shares
65The plan must provide that dividend shares are to be...
Acquisition of dividend shares
66(1) The plan must provide that the trustees must treat...
Holding period for dividend shares
67Paragraphs 36 and 37 (the holding period and related matters)...
Reinvestment: amounts to be carried forward
68(1) This paragraph applies where an amount is not reinvested—...
Cash dividends where no requirement to reinvest
69(1) The plan must require any distributable cash dividends in...
Part 9Trustees
Requirements etc. relating to trustees: introduction
70(1) A SIP must meet the plan requirements contained in—...
Establishment of trustees
71(1) The plan must provide for the establishment of a...
Duty to monitor participants in connected schemes
71AThe trust instrument must require the trustees to maintain records...
Duty to act in accordance with participant’s directions
72(1) The trust instrument must require the trustees—
Duty not to dispose of plan shares
73(1) This paragraph applies to a participant’s plan shares that...
Duty to make payments to participants
74(1) The trust instrument must require the trustees to pay...
Duty to give notice of award of shares etc.
75(1) The trust instrument must make the following provision regarding...
Power of trustees to borrow
76The trust instrument may provide that the trustees have power...
Power of trustees to raise funds to subscribe for rights issue
77(1) The trustees may dispose of some of the rights...
Acquisition by trustees of shares from employee share ownership trust
78(1) The trust instrument must provide that, where there is...
Meeting by trustees of PAYE obligations
79(1) The plan must make provision to ensure that, where...
Other duties of trustees in relation to tax liabilities
80(1) The trust instrument must require the trustees to maintain...
Part 10Approval of plans
Application for approval
81(1) Where— (a) a SIP has been established, and
Appeal against refusal of approval
82(1) If an officer of Revenue and Customs refuses to...
Withdrawal of approval
83(1) This paragraph applies if a disqualifying event (see paragraph...
Disqualifying events for purposes of paragraph 83
84(1) The following are disqualifying events for the purposes of...
Appeal against withdrawal of approval
85(1) This paragraph applies if a SIP has been approved...
Part 11Supplementary provisions
Company reconstructions
86(1) In this Part of this Schedule a “company reconstruction”...
Consequences of company reconstructions
87(1) In the SIP code references to a participant’s plan...
Treatment of shares acquired under rights issue
88(1) This paragraph applies for the purposes of the SIP...
Termination of plan
89(1) The plan may provide for the company to issue...
Effect of plan termination notice
90(1) This paragraph applies if the company has issued a...
Jointly owned companies
91(1) This paragraph applies for the purposes of the provisions...
Determination of market value
92(1) For the purposes of the SIP code the “market...
Power to require information
93(1) An officer of Revenue and Customs may by notice...
Meaning of “associated company”
94(1) For the purposes of the SIP code one company...
Meaning of participant ceasing to be in relevant employment
95(1) This paragraph explains what is meant, for the purposes...
Meaning of shares being withdrawn from plan
96(1) For the purposes of the SIP code plan shares...
Meaning of shares ceasing to be subject to plan
97(1) For the purposes of the SIP code plan shares...
Meaning of “the specified retirement age”
98(1) In the SIP code, in relation to a SIP,...
Minor definitions
99(1) In the SIP code— “articles of association”, in relation...
Index of defined expressions
100In the SIP code the following expressions are defined or...
SCHEDULE 3Approved SAYE option schemes
Part 1Introduction
Approval of SAYE option schemes
1(1) This Schedule makes provision for the approval of SAYE...
SAYE option schemes
2(1) In the SAYE code an “SAYE option scheme” means...
Group schemes
3(1) An SAYE option scheme established by a company that...
Part 2General requirements for approval
General requirements for approval: introduction
4An SAYE option scheme must meet the requirements of— paragraph...
General restriction on contents of scheme
5The scheme must not contain features which are neither essential...
All-employee nature of scheme
6(1) The scheme must provide that every person who meets...
Participation on similar terms
7(1) The requirements of this paragraph are—
No preferential treatment for directors and senior employees
8(1) The requirement of this paragraph is that, if the...
Part 3Eligibility of individuals to participate in scheme
Requirements relating to the eligibility of individuals: introduction
9An SAYE option scheme must meet the requirements of— paragraph...
The employment requirement
10(1) The scheme must ensure that an individual is not...
The “no material interest” requirement
11(1) The scheme must ensure that an individual is not...
Meaning of “material interest”
12(1) In paragraph 11 (the “no material interest” requirement) references...
Material interest: options and interests in SIPs
13(1) For the purposes of paragraph 12 (meaning of “material...
Meaning of “associate”
14(1) In paragraph 11(2) (the “no material interest” requirement) “associate”,...
Meaning of “associate”: trustees of employee benefit trust
15(1) This paragraph applies for the purposes of paragraph 14(1)(c)...
Meaning of “associate”: trustees of discretionary trust
16(1) This paragraph applies for the purposes of paragraph 14(1)(c)...
Part 4Shares to which schemes can apply
Requirements relating to shares that may be subject to share options: introduction
17(1) An SAYE option scheme must meet the requirements of—...
Shares must be ordinary shares of certain companies
18Eligible shares must form part of the ordinary share capital...
Requirements as to listing
19(1) Eligible shares must be— (a) shares of a class...
Shares must be fully paid up and not redeemable
20Eligible shares must be— (a) fully paid up, and
Only certain kinds of restriction allowed
21(1) Eligible shares must not be subject to any restrictions...
Requirements as to other shareholdings
22(1) The majority of the issued shares of the same...
Part 5Requirement for linked savings arrangement
Requirements as to linked savings arrangement : introduction
23An SAYE option scheme must meet the requirements of— paragraph...
Payments for shares to be linked to approved savings arrangements
24(1) The scheme must provide for shares acquired by the...
Requirements as to contributions to savings arrangements
25(1) The scheme must provide for a person’s contributions under...
Repayments under a savings arrangement : whether bonuses included
26(1) For the purposes of this Schedule repayments under a...
Part 6Requirements etc. relating to share options
Requirements etc. relating to share options: introduction
27(1) An SAYE option scheme must meet the requirements of—...
Requirements as to price for acquisition of shares
28(1) The price at which shares may be acquired by...
Share options must not be transferable
29(1) The scheme must ensure that share options granted to...
Time for exercising options: general
30(1) The scheme must ensure that share options granted under...
Requirement to have a “specified age”
31(1) The scheme must specify the age that is to...
Exercise of options: death
32The scheme must provide that, if a participant dies before...
Exercise of options: reaching specified age without retiring
33(1) The scheme must provide that, if a participant (“P”)...
Exercise of options: scheme-related employment ends
34(1) The scheme must provide that, if a participant (“P”)...
Time when scheme-related employment ends
35(1) This paragraph applies for the purposes of paragraph 34...
Exercise of options: employment in associated company at bonus date
36The scheme may provide that if at the bonus date...
Exercise of options: company events
37(1) The scheme may provide that share options relating to...
Part 7Exchange of share options
Exchange of options on company reorganisation
38(1) An SAYE option scheme may provide that if—
Requirements about share options granted in exchange
39(1) This paragraph applies to a scheme that makes provision...
Part 8Approval of schemes
Application for approval
40(1) Where— (a) an SAYE option scheme has been established,...
Appeal against refusal of approval
41(1) If an officer of Revenue and Customs refuses to...
Withdrawal of approval
42(1) If any disqualifying event occurs in connection with an...
Notice of decision about alteration
43Where an officer of Revenue and Customs —
Appeal against withdrawal of approval etc.
44(1) This paragraph applies if an SAYE option scheme has...
Part 9Supplementary provisions
Power to require information
45(1) An officer of Revenue and Customs may by notice...
Jointly owned companies
46(1) This paragraph applies for the purposes of the provisions...
Meaning of “associated company”
47(1) For the purposes of the SAYE code, except in...
Minor definitions
48(1) In the SAYE code— “ certified SAYE savings arrangement...
Index of defined expressions
49In the SAYE code the following expressions are defined or...
SCHEDULE 4Approved CSOP schemes
Part 1Introduction
Approval of CSOP schemes
1(1) This Schedule makes provision for the approval of CSOP...
CSOP schemes
2(1) In the CSOP code a “CSOP scheme” means (in...
Group schemes
3(1) A CSOP scheme established by a company that controls...
Part 2General requirements for approval
General requirements for approval: introduction
4A CSOP scheme must meet the requirements of— paragraph 5...
General restriction on contents of scheme
5The scheme must not contain features which are neither essential...
Limit on value of shares subject to options
6(1) The scheme must provide that an individual may not...
Part 3Eligibility of individuals to participate in scheme
Requirements relating to the eligibility of individuals: introduction
7A CSOP scheme must meet the requirements of— paragraph 8...
The employment requirement
8(1) The scheme must ensure that an individual is not...
The “no material interest” requirement
9(1) The scheme must ensure that an individual is not...
Meaning of “material interest”
10(1) In paragraph 9 (the “no material interest” requirement) references...
Material interest: options and interests in SIPs
11(1) For the purposes of paragraph 10 (meaning of “material...
Meaning of “associate”
12(1) In paragraph 9(2) (the “no material interest” requirement) “associate”,...
Meaning of “associate”: trustees of employee benefit trust
13(1) This paragraph applies for the purposes of paragraph 12(1)(c)...
Meaning of “associate”: trustees of discretionary trust
14(1) This paragraph applies for the purposes of paragraph 12(1)(c)...
Part 4Shares to which schemes can apply
Requirements relating to shares that may be subject to share options: introduction
15(1) A CSOP scheme must meet the requirements of— paragraph...
Shares must be ordinary shares of certain companies
16Eligible shares must form part of the ordinary share capital...
Requirements as to listing
17(1) Eligible shares must be — (a) shares of a...
Shares must be fully paid up and not redeemable
18Eligible shares must be— (a) fully paid up, and
Only certain kinds of restriction allowed
19(1) Eligible shares must not be subject to any restrictions...
Requirements as to other shareholdings
20(1) The majority of the issued shares of the same...
Part 5Requirements etc. relating to share options
Requirements etc. relating to share options: introduction
21(1) A CSOP scheme must meet the requirements of— paragraph...
Requirements as to price for acquisition of shares
22(1) The price at which shares may be acquired by...
Share options must not be transferable
23(1) The scheme must ensure that share options granted to...
Exercise of options: ceasing to be director or employee
24(1) The scheme may provide that an individual may exercise...
Exercise of options: death
25The scheme may provide that, if a participant dies before...
Part 6Exchange of share options
Exchange of options on company reorganisation
26(1) A CSOP scheme may provide that if—
Requirements about share options granted in exchange
27(1) This paragraph applies to a scheme that makes provision...
Part 7Approval of schemes
Application for approval
28(1) Where— (a) a CSOP scheme has been established, and...
Appeal against refusal of approval
29(1) If an officer of Revenue and Customs refuses to...
Withdrawal of approval
30(1) If any disqualifying event occurs in connection with an...
Notice of decision about alteration
31Where an officer of Revenue and Customs —
Appeal against withdrawal of approval etc.
32(1) This paragraph applies if a CSOP scheme has been...
Part 8Supplementary provisions
Power to require information
33(1) An officer of Revenue and Customs may by notice...
Jointly owned companies
34(1) This paragraph applies for the purposes of the provisions...
Meaning of “associated company”
35(1) For the purposes of the CSOP code one company...
Retirement age
35AA retirement age specified in a CSOP scheme—
Minor definitions
36(1) In the CSOP code— “company” means a body corporate;...
Index of defined expressions
37In the CSOP code the following expressions are defined or...
SCHEDULE 5Enterprise management incentives
Part 1Introduction
Enterprise management incentives: qualifying options
1(1) This Schedule makes provision for establishing what is a...
Meaning of “the relevant company” and “the employer company”
2In the EMI code, in relation to a share option—...
Part 2General requirements
General requirements: introduction
3A share option is not a qualifying option unless the...
Purpose of granting the option
4To be a qualifying option a share option must be...
Maximum entitlement of employee: financial limit on unexercised options
5(1) An employee may not hold unexercised qualifying options which—...
Maximum entitlement of employee: further limit of 3 years
6(1) Sub-paragraph (2) applies if an employee (“E”) has already...
Maximum value of options in respect of relevant company’s shares
7(1) The total value of shares in the relevant company...
Part 3Qualifying companies
Qualifying companies: introduction
8A “qualifying company” is a company in relation to which...
The independence requirement
9(1) The independence requirement consists of two conditions.
The qualifying subsidiaries requirement
10(1) A company that has one or more subsidiaries is...
Meaning of “qualifying subsidiary”
11(1) A company (“the subsidiary”) is a qualifying subsidiary of...
The property managing subsidiaries requirement
11A(1) A company is not a qualifying company if it...
Meaning of “qualifying 90% subsidiary”
11B(1) A company (“the subsidiary”) is a qualifying 90% subsidiary...
The gross assets requirement
12(1) The gross assets requirement in the case of a...
The trading activities requirement: single company
13(1) The trading activities requirement in the case of a...
The trading activities requirement: parent company
14(1) The trading activities requirement in the case of a...
Meaning of “qualifying trade”
15(1) A trade is a qualifying trade if—
Excluded activities
16The following are excluded activities— (a) dealing in land, in...
Excluded activities: wholesale and retail distribution
17(1) This paragraph supplements paragraph 16(b). (2) A trade of...
Excluded activities: leasing of certain ships
18(1) This paragraph supplements paragraph 16(d) so far as it...
Excluded activities: receipt of royalties or licence fees
19(1) This paragraph supplements paragraph 16(e) (receipt of royalties or...
Excluded activities: property development
20(1) This paragraph supplements paragraph 16(g). (2) “Property development” means...
Excluded activities: hotels and comparable establishments
21(1) This paragraph supplements paragraph 16(j). (2) A “comparable establishment”...
Excluded activities: nursing homes and residential care homes
22(1) This paragraph supplements paragraph 16(k). (2) “Nursing home” means...
Excluded activities: provision of facilities for another business
23(1) This paragraph applies where a company (“the service provider”)...
Part 4Eligible employees
Eligible employees: introduction
24An individual is an “eligible employee” in relation to the...
The employment requirement
25To be an eligible employee in relation to the relevant...
The requirement as to commitment of working time
26(1) For an individual (“the employee”) to be an eligible...
Meaning of “working time”
27(1) In paragraph 26 “working time” means—
The “no material interest” requirement
28(1) An individual is not an eligible employee in relation...
Meaning of “material interest”
29(1) In paragraph 28 (the “no material interest” requirement) references...
Material interest: options and interests in SIPs
30(1) This paragraph applies for the purposes of paragraph 29...
Meaning of “associate”
31(1) In paragraph 28(2) (the “no material interest” requirement) “associate”,...
Meaning of “associate”: trustees of employee benefit trust
32(1) This paragraph applies for the purposes of paragraph 31(1)(c)...
Meaning of “associate”: trustees of discretionary trust
33(1) This paragraph applies for the purposes of paragraph 31(1)(c)...
Part 5Requirements relating to options
Requirements relating to options: introduction
34A share option is not a qualifying option unless the...
Type of shares that may be acquired
35(1) The option must confer a right to acquire shares...
Option to be capable of exercise within 10 years
36(1) The option must be capable of being exercised within...
Terms of option to be agreed in writing
37(1) The option must take the form of a written...
Non-assignability of rights
38The terms on which the option is granted—
Part 6Company reorganisations
Company reorganisations: introduction
39(1) This Part applies in connection with company reorganisations.
Meaning of “qualifying exchange of shares”
40(1) For the purposes of the EMI code there is...
Grant of replacement option
41(1) This paragraph applies if both of the following conditions...
Period within which replacement option must be granted
42(1) To qualify as a replacement option the new option...
Further requirements to be met as to replacement option
43(1) For the new option to qualify as a replacement...
Part 7Notification of option to inland revenue
Notice of option to be given to Inland Revenue
44(1) For a share option to be a qualifying option,...
Correction of notice by Inland Revenue
45(1) An officer of Revenue and Customs may amend a...
Notice of enquiry
46(1) This paragraph applies where notice of a share option...
Completion of enquiry: closure notices
47(1) An enquiry under paragraph 46(2) is completed when an...
Completion of enquiry: application for closure notice to be given
48(1) An application may be made under this paragraph for...
Effect of enquiry
49(1) If an officer of Revenue and Customs does not...
Appeals
50(1) The employer company may appeal against a decision of...
Part 8Supplementary provisions
Power to require information
51(1) An officer of Revenue and Customs may by notice...
Annual returns
52(1) A company whose shares are subject to a qualifying...
Compliance with time limits
53(1) For the purposes of this Part and Part 7...
Power to amend by Treasury order
54(1) The Treasury may by order amend the EMI code—...
Meaning of “market value” of shares
55(1) For the purposes of the EMI code the “market...
Determination of market value of shares
56(1) This paragraph applies to the determination of the market...
Appeal against determination of market value of shares
57(1) The employer company may appeal against any determination by...
Minor definitions
58In the EMI code— “arrangements” includes any scheme, agreement or...
Index of defined expressions
59In the EMI code the following expressions are defined or...
SCHEDULE 6Consequential Amendments
Part 1Income and Corporation Taxes Act 1988
1The Income and Corporation Taxes Act 1988 (c. 1) is...
2(1) Amend section 1 (the charge to income tax) as...
3In section 4(1) (construction of references in Income Tax Acts...
4In section 9(3) (computation of income for corporation tax: application...
5(1) Amend section 18 (Schedule D) as follows.
6Omit section 19 (Schedule E).
7In section 21A(2) (computation of amount chargeable)—
8Omit section 58 (foreign pensions).
9In section 65(2) (Cases IV and V assessments: general) omit...
10After section 68 insert— Share incentive plans: application of section...
11(1) Amend section 84A (costs of establishing share option or...
12After section 85A insert— Approved share incentive plans Schedule 4AA (which provides for deductions relating to approved share...
13(1) Amend section 86A (charitable donations: contributions to agent’s expenses)...
14Omit sections 131 to 134 (miscellaneous provisions relating to the...
15Omit sections 135 to 137 (provisions relating to gains by...
16(1) Amend section 138 (share acquisitions by directors and employees)...
17Omit section 140 (further interpretation of sections 135 to 139)....
18Omit sections 140A to 140H (further provisions relating to share...
19Omit sections 141 to 144 (vouchers and credit-tokens).
20Omit section 144A (payments received free of tax).
21Omit sections 145 to 147 (living accommodation).
22Omit sections 148 to 151A (payments on retirement, sick pay...
23For the sidenote to section 152 (notification of amount taxable...
24Omit sections 153 to 159AC and sections 160 to 168G...
25Omit section 185 (approved share option schemes).
26(1) Amend section 186 (approved profit sharing schemes) as follows....
27In section 187 (interpretation of sections 185 and 186 and...
28Omit the following provisions (which give relief from income tax...
29Omit sections 202A and 202B (assessment on receipts basis).
30Omit sections 203 to 204 (pay as you earn).
31Omit sections 205 and 206 (assessments).
32Omit section 206A (PAYE settlement agreements).
33Omit section 207 (disputes as to domicile or ordinary residence)....
34After section 251 insert— Approved share incentive plans Application of...
35In section 257C(2A) (indexation of amounts in sections 257 and...
36After section 266 insert— Life assurance premiums paid by employer...
37In section 306(7) (claims) for “regulations made under section 203”...
38In section 307(6)(a)(i) (withdrawal of relief) for “regulations under section...
39Omit section 313 (taxation of consideration for certain restrictive undertakings)....
40In section 314(1) (divers and diving supervisors) for the words...
41Omit sections 315 to 318 (pensions etc. paid in respect...
42Omit section 319 (crown servants: foreign service allowance).
43Omit section 321 (consuls and other official agents).
44(1) Amend section 322 (consular officers and employees) as follows....
45(1) Amend section 323 (visiting forces) as follows.
46Omit section 330 (compensation for National-Socialist persecution).
47(1) Amend section 332 (expenditure and houses of ministers of...
48(1) Amend section 336 (temporary residents in the United Kingdom)...
49In section 347A(5) (annual payments: general rule) for “, 68(1)(b)...
50(1) Amend section 348 (payments out of profits or gains...
51(1) Amend section 349 (payments not out of profits or...
52In section 376(2) (qualifying borrowers and qualifying lenders) for the...
53In section 391(2) (losses from trade etc. carried on abroad)...
54(1) Amend section 392 (Case VI losses) as follows.
55(1) Amend section 418 (“distribution” to include certain expenses of...
56In section 545(1)(a) (capital redemption policies) after “Schedule D” insert...
57In section 550(7) (relief where gain charged at a higher...
58In section 559(1A) (sub-contractors in the construction industry) for “chargeable...
59In section 561(6) (exceptions from section 559), for “the same...
60In section 565(2C)(a) (conditions to be satisfied by companies), for...
61In section 566(1) (general powers to make regulations under Chapter...
62(1) Section 577 (business entertaining expenses) is amended as follows....
63Omit section 579(1) (statutory redundancy payments).
64Omit section 580(3) (provisions supplementary to section 579(1)).
65In section 580A(7)(b) (relief from tax on annual payments under...
66(1) Amend section 585 (relief from tax on delayed remittances)...
67(1) Amend section 588 (training courses for employees) as follows....
68Omit section 589 (qualifying courses of training etc.).
69(1) Section 589A (counselling services for employees) is amended as...
70(1) Section 589B (qualifying counselling services etc.) is amended as...
71In section 591D (provisions supplementary to section 591C) omit subsection...
72For section 592(7) (exempt approved schemes) substitute—
73In section 594(1) (exempt statutory schemes)— (a) for the words...
74Omit sections 595 and 596 (payments by employer to retirement...
75Omit sections 596A to 596C (benefits under non-approved retirement benefits...
76Omit section 597 (charge to tax: pensions).
77In section 599A (charge to tax: payments out of surplus...
78Omit section 600 (charge to tax: unauthorised payments to or...
79(1) Amend section 606 (default of administrator of retirement benefits...
80(1) Amend section 607 (marine pilots: pilots' benefit fund) as...
81In section 608 (charge to tax on annuities paid out...
82In section 612(1) (interpretation etc. of Chapter) in the definition...
83In section 613 (Parliamentary pension funds) omit subsections (1) to...
84In section 614(3) (exemptions and reliefs in respect of income...
85In section 615 (exemption from tax in respect of certain...
86Omit section 616 (other overseas pensions).
87(1) Amend section 617 (social security benefits and contributions) as...
88Omit section 617A (tax credits under Part 1 of Tax...
89In section 624(2) (sponsored superannuation schemes and controlling directors) for...
90(1) Amend section 638 (other restrictions on approval of a...
91(1) Section 643 (employer’s contributions and personal pension income etc.)...
92(1) Amend section 644 (meaning of “relevant earnings”) as follows....
93(1) Amend section 645 (earnings from pensionable employment) as follows....
94In section 646(2) (meaning of “net relevant earnings”) for paragraph...
95(1) Amend section 646A (earnings from associated employments) as follows....
96Omit sections 647 to 648A (personal pensions: unauthorised payments, contributions...
97In section 657(2)(f)(i) (purchased life annuities to which section 656...
98In section 658A(1) (charges and assessments on administrators) after “this...
99(1) Amend section 659B (definition of insurance company) as follows....
100After section 686A insert— Share incentive plans: distributions in respect...
101In section 779(13)(e) (sale and lease-back: limitation on tax reliefs),...
102In section 781(4)(d) (assets leased to traders and others), for...
103In section 794(2)(b) (requirements as to residence) for “income tax...
104In section 824(4A) (repayment supplement: individuals and others) for “section...
105(1) Amend section 828 (orders and regulations made by the...
106In section 830 (territorial sea and designated areas) omit subsection...
107In section 831(3) (interpretation of ICTA) before the entry relating...
108(1) Amend section 833 (interpretation of Income Tax Acts) as...
109After Schedule 4 insert— SCHEDULE 4AA Share incentive plans: corporation...
110Omit Schedules 6 and 6A (taxation of directors and others:...
111Omit Schedules 7 and 7A (taxation of benefit of loans)....
112(1) Amend Schedule 9 (approved share option schemes and profit...
113(1) Amend Schedule 10 (further provisions relating to profit sharing...
114Omit Schedule 11 (payments and other benefits in connection with...
115Omit Schedule 11A (removal benefits and expenses).
116Omit Schedule 12 (foreign earnings).
117Omit Schedule 12AA (mileage allowances).
118Omit Schedule 12A (ordinary commuting and private travel).
119In Schedule 14 (modification of section 266 in certain cases),...
120(1) Amend paragraph 2 of Schedule 15A (contractual savings schemes)...
121(1) Amend paragraph 5B of Schedule 18 (group relief: equity...
Part 2Other enactments
Finance Act 1969 (c. 32)
122(1) Section 58 of the Finance Act 1969 (disclosure of...
Taxes Management Act 1970 (c. 9)
123The Taxes Management Act 1970 is amended as follows.
124In section 7(4) and (5) (notice of liability to income...
125(1) Amend section 9 (returns to include self-assessment) as follows....
126(1) Amend section 15 (return of employee’s emoluments etc.) as...
127For section 16A substitute— Agency workers (1) This section applies where— (a) any services which an...
128In section 42(3) (procedure for making claims etc.) for “section...
129In section 46B(5) (questions as to the application of provisions...
130In section 59A (payments on account of income tax)—
131(1) Amend section 59B (payment of income tax and capital...
132In section 62(1A)(a) (priority of claim for tax)—
133In section 63(3)(a) (recovery of tax in Scotland) for “section...
134In section 64(1A)(a) (priority of claim for tax in Scotland)—...
135(1) Amend section 70 (evidence) as follows.
136In section 91(3)(c) (effect on interest of reliefs) for “section...
137(1) Amend the Table in section 98 (special returns, etc.)...
138In section 98A(1) (special penalties in the case of certain...
139In section 118 (interpretation) after the entry relating to “inspector”...
140In section 119(4) (construction of the Act) after “1992 Act”...
141In paragraph 4(1A) of Schedule 1A (claims etc. not included...
142In paragraph 3 of Schedule 3 (rules for assigning proceedings...
143In Schedule 3A (electronic lodgement of tax returns etc.) in...
Finance Act 1973 (c. 51)
144Schedule 15 to the Finance Act 1973 (territorial extension of...
145In paragraph 2(b) for “emoluments” substitute “ earnings or amounts...
146In paragraph 5 for “Schedule E” substitute “ the Income...
Finance Act 1974 (c. 30)
147In section 24 of the Finance Act 1974 (returns of...
Interpretation Act 1978 (c. 30)
148In Schedule 1 to the Interpretation Act 1978 (words and...
Education (Scotland) Act 1980 (c. 44)
149In section 73B of the Education (Scotland) Act 1980 (grants...
Inheritance Tax Act 1984 (c. 51)
150The Inheritance Tax Act 1984 is amended as follows.
151(1) Amend the following provisions as provided in sub-paragraph (2)—...
152In section 14(1) (waiver of remuneration), for “would be assessable...
Bankruptcy (Scotland) Act 1985 (c. 66)
153In paragraph 1(1) of Schedule 3 to the Bankruptcy (Scotland)...
Insolvency Act 1986 (c. 45)
154In paragraph 1 of Schedule 6 to the Insolvency Act...
Finance Act 1988 (c. 39)
155(1) Section 73 of the Finance Act 1988 (consideration for...
Finance Act 1989 (c. 26)
156The Finance Act 1989 is amended as follows.
157For section 43 substitute— Schedule D: computation (1) In calculating profits or gains of a trade to...
158For section 44 substitute— Investment and insurance companies: computation (1) In calculating the profits of an investment company for...
159In section 53(2)(f) (amendments consequential on the substitution of a...
160(1) Amend section 69 (chargeable events in relation to employee...
161(1) Amend section 76 (non-approved retirement benefits schemes) as follows....
162In section 178(2) (setting of rates of interest)—
163(1) Amend Schedule 5 (employee share ownership trusts) as follows....
Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19))
164In paragraph 1 of Schedule 4 to the Insolvency (Northern...
Finance Act 1990 (c. 29)
165The Finance Act 1990 is amended as follows.
166(1) Amend section 25(2) (donations to charity by individuals) as...
167(1) Amend paragraph 4 of Schedule 14 (amendments of sections...
Finance Act 1991 (c. 31)
168(1) Amend section 38 of the Finance Act 1991 (employee...
Social Security Contributions and Benefits Act 1992 (c. 4)
169The Social Security Contributions and Benefits Act 1992 is amended...
170In section 1 (outline of contributory system), in subsection (2)(bb)...
171In section 2 (categories of earners), in subsection (1)(a) for...
172(1) Amend section 4 (payments treated as remuneration and earnings)...
173In section 7(1)(b) (meaning of “secondary contributor”) for “emoluments” in...
174(1) Amend section 10 (Class 1A National Insurance contributions: benefits...
175(1) Amend section 10ZA (liability of third party provider of...
176(1) Amend section 10ZB (non-cash vouchers provided by third parties)...
177(1) Amend section 10A (Class 1B National Insurance contributions) as...
178(1) Amend section 122(1) (interpretation of Parts 1 to 6...
179In section 126(5)(a)(ii) (trade disputes) for “emoluments in pursuance of...
180(1) Amend section 150(2) (interpretation of Part 10) as follows....
181In section 163(1) (interpretation of Part 11), in paragraph (a)...
182In section 171(1) (interpretation of Part 12), in paragraph (a)...
183In section 171ZJ(2)(a) (Part 12ZA: supplementary) for “emoluments chargeable to...
184In section 171ZS(2)(a) (Part 12ZB: supplementary) for “emoluments chargeable to...
185In Schedule 1 (supplementary provisions relating to contributions of Classes...
Social Security Administration Act 1992 (c. 5)
186The Social Security Administration Act 1992 is amended as follows....
187(1) Amend section 139(11) (definitions used in provisions relating to...
188(1) Amend section 159B(6) (effect of alterations affecting state pension...
189(1) Amend section 162(5) (destination of national insurance contributions) as...
Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7)
190The Social Security Contributions and Benefits (Northern Ireland) Act 1992...
191In section 1 (outline of contributory system), in subsection (2)(bb)...
192In section 2 (categories of earners), in subsection (1)(a) for...
193(1) Amend section 4 (payments treated as remuneration and earnings)...
194In section 7(1)(b) (meaning of “secondary contributor”) for “emoluments” in...
195(1) Amend section 10 (Class 1A National Insurance contributions: benefits...
196(1) Amend section 10ZA (liability of third party provider of...
197(1) Amend section 10ZB (non-cash vouchers provided by third parties)...
198(1) Amend section 10A (Class 1B National Insurance contributions) as...
199(1) Amend section 121(1) (interpretation of Parts 1 to 6...
200In section 125(5)(a)(ii) (trade disputes) for “emoluments in pursuance of...
201(1) Amend section 146(2) (interpretation of Part 10) as follows....
202In section 159(1) (interpretation of Part 11), in paragraph (a)...
203In section 167(1) (interpretation of Part 12), in paragraph (a)...
204In Schedule 1 (supplementary provisions relating to contributions of Classes...
Social Security Administration (Northern Ireland) Act 1992 (c. 8)
205(1) Section 139B(6) of the Social Security Administration (Northern Ireland)...
206In section 142(5) of that Act (destination of national insurance...
Taxation of Chargeable Gains Act 1992 (c. 12)
207The Taxation of Chargeable Gains Act 1992 is amended as...
208In section 9(2) (residence, including temporary residence)—
209In section 11(1) (visiting forces, agents-general etc.)—
210(1) Amend section 120 (increased expenditure by reference to tax...
211(1) Amend section 149B (employee incentive schemes: conditional interests in...
212After section 149B insert— Priority share allocations Section 17(1) shall not apply to an acquisition of shares...
213In section 222(8D)(b) (relief on disposal of private residence), for...
214In section 236A (employee share ownership plans), and in the...
215In section 238(2)(a) (approved profit sharing and share option schemes),...
216After section 238 insert— Approved share schemes and share incentives...
217After section 263 insert— Former employees: employment-related liabilities (1) This section applies if— (a) a deduction of the...
218In section 271 (other miscellaneous exemptions), for subsection (1)(c) substitute—...
219(1) Amend section 288(1) (interpretation) as follows.
220(1) Amend Schedule 7C (relief for transfers to approved share...
221After Schedule 7C insert— SCHEDULE 7D Approved share schemes and...
Pension Schemes Act 1993 (c. 48)
222In section 181(1) of the Pension Schemes Act 1993 (general...
Pension Schemes (Northern Ireland) Act 1993 (c. 49)
223In section 176(1) of the Pension Schemes (Northern Ireland) Act...
Finance Act 1994 (c. 9)
224(1) In the Finance Act 1994, paragraph 27 of Schedule...
Finance Act 1995 (c. 4)
225The Finance Act 1995 is amended as follows.
226(1) Amend section 128 (limit on income chargeable on non-residents:...
227In section 137(7) (part-time workers: miscellaneous provisions) for “Subsections (2)...
Jobseekers Act 1995 (c. 18)
228The Jobseekers Act 1995 is amended as follows.
229In section 15(2)(c)(i) (effect on other claimants) for “emoluments in...
230In section 26(3) (the back to work bonus) for the...
Child Support Act 1995 (c. 34)
231For section 10(4) of the Child Support Act 1995 (child...
Child Support (Northern Ireland) Order 1995 (S.I. 1995/2702 (N.I. 13))
232For Article 4(4) of the Child Support (Northern Ireland) Order...
Jobseekers (Northern Ireland) Order 1995 (S.I. 1995/2705 (N.I. 15))
233The Jobseekers (Northern Ireland) Order 1995 is amended as follows....
234In Article 17(2)(c)(i) (effect on other claimants) for “emoluments in...
235In Article 28(3) (the back to work bonus) for the...
Teaching and Higher Education Act 1998 (c. 30)
236In section 22 of the Teaching and Higher Education Act...
Scotland Act 1998 (c. 46)
237In section 79(3) of the Scotland Act 1998 (supplemental powers...
Education (Student Support) (Northern Ireland) Order 1998 (S.I. 1998/1760 (N.I. 14))
238In Article 3 of the Education (Student Support) (Northern Ireland)...
Tax Credits Act 1999 (c. 10)
239The Tax Credits Act 1999 is amended as follows.
240In section 6(1) (payment of tax credit by employers etc.)...
241In paragraph 10(1) of Schedule 2 (transfer of functions), in...
Finance Act 2000 (c. 17)
242The Finance Act 2000 is amended as follows.
243(1) Amend section 38 (payroll deduction scheme) as follows.
244(1) Amend Schedule 12 (provision of services through an intermediary)...
245(1) In Schedule 20 (tax relief for expenditure of research...
Capital Allowances Act 2001 (c. 2)
246The Capital Allowances Act 2001 is amended as follows.
247(1) Amend section 4 (capital expenditure) as follows.
248(1) Amend section 20 (employments and offices) as follows.
249In section 61(2) (disposal events and disposal values), in entry...
250In section 63(1) (cases in which disposal value is nil)...
251In section 72(3) (disposal values), in entry 2(b) of the...
252In section 88(c) (sales at under-value) for “Schedule E” substitute...
253In section 262 (employments and offices)— (a) in paragraph (a)...
254In section 423(1) (disposal value for sections 421 and 422),...
255At the end of Part 1 of Schedule 1 (abbreviations)...
256In Part 2 of Schedule 1 (defined expressions used in...
Finance Act 2001 (c. 9)
257For section 95 of the Finance Act 2001 (exemptions in...
258(1) In Schedule 22 (remediation of contaminated land), amend paragraph...
Social Security Contributions (Share Options) Act 2001 (c. 20)
259The Social Security Contributions (Share Options) Act 2001 is amended...
260In section 2(3)(b) (effect of notice under section 1) for...
261(1) Amend section 3 (special provision for roll-overs) as follows....
262In section 5(2)(c) (interpretation)— (a) for “subsection (8) of section...
State Pension Credit Act 2002 (c. 16)
263(1) Section 17(1) of the State Pension Credit Act 2002...
Tax Credits Act 2002 (c. 21)
264The Tax Credits Act 2002 is amended as follows.
265(1) Amend section 25 (payments of working tax credit by...
266In section 29(5) (recovery of overpayments) for “regulations under section...
State Pension Credit Act (Northern Ireland) 2002 (c. 14 (N.I.))
267(1) Section 17(1) of the State Pension Credit Act (Northern...
Certain corresponding Northern Ireland provision
268(1) This paragraph applies if provision is made for Northern...
269(1) This paragraph applies if provision is made for Northern...
SCHEDULE 7Transitionals and savings
Part 1Continuity of the law
1The repeal of provisions and their enactment in a rewritten...
2Paragraph 1 does not apply to any change in the...
3Any subordinate legislation or other thing which—
4Any reference (express or implied) in any enactment, instrument or...
5Any reference (express or implied) in any enactment, instrument or...
6Paragraphs 1 to 5 have effect instead of section 17(2)...
7Paragraphs 4 and 5 apply only in so far as...
Part 2Employment income: charge to tax
Taxable earnings
8(1) The charging provisions of Chapters 4 and 5 of...
Relief for delayed remittances
9(1) This paragraph applies where one or more of the...
10Section 36(2) (the definition of “blocked earnings”) applies in relation...
11(1) This paragraph applies where a claimant—
Disputes as to domicile or ordinary residence
12(1) Nothing in sections 42 and 43 (disputes as to...
Application of provisions to agency workers
13In relation to times before 6th April 2003, Chapter 7...
14Section 44(2) does not apply in relation to—
Part 3Employment income: earnings and benefits etc. treated as earning
Taxable benefits: dispensations relating to benefits within provisions not applicable to lower-paid employments
15(1) An existing notification— (a) is not affected by any...
16(1) This paragraph applies if— (a) mileage allowance payments are...
Taxable benefits: the benefits code
17(1) In relation to times before 6th April 2003, references...
Taxable benefits: vouchers and credit-tokens
18(1) For the purpose of applying sections 82 to 89...
19(1) This paragraph applies to a notification which, immediately before...
20(1) This paragraph applies if— (a) mileage allowance payments are...
Taxable benefits: living accommodation
21(1) Section 107 (special rule for calculating cost of providing...
Taxable benefits: cars, vans and related benefits
22(1) In relation to a capital sum contributed by the...
23(1) In relation to a capital sum contributed by the...
24(1) This paragraph applies to the operation of section 156(4)...
Taxable benefits: loans
25(1) Chapter 7 of Part 3 applies to a loan...
26(1) This paragraph relates to the operation of section 183...
27(1) Subject to paragraph 25(2), where a loan is made...
Taxable benefits: notional loans in respect of acquisitions of shares
28Chapter 8 of Part 3 does not apply in relation...
29(1) This paragraph relates to the operation of Chapter 8...
Taxable benefits: disposals of shares for more than market value
30. . . . . . . . . ....
31. . . . . . . . . ....
Taxable benefits: residual liability to charge
32(1) This paragraph applies in relation to Chapter 10 of...
Part 4Employment income: exemptions
Incidental overnight expenses and benefits
33In determining whether section 240(1) or (2) or 268 applies—...
34In determining— (a) whether section 141(6C) and (6D), 142(3C) and...
Removal benefits and expenses
35(1) Section 287 (limit on exemption for removal benefits and...
36A direction under paragraph 6(2) of Schedule 11A to ICTA...
Retraining courses
37(1) The repeal of sections 588(5)(a) and 589(3) and (4)...
Suggestion awards
38(1) This paragraph applies for the purpose of determining the...
Part 5Employment income: deductions
Earnings charged on remittance
39In relation to expenses incurred before the tax year 2003-04,...
Non-domiciled employee’s travel costs and expenses: “qualifying arrival date”
40In relation to any time before 6th April 2003, section...
Part 6Employment income: income which is not earnings or related to securities
Benefits from non-approved pension schemes
41(1) Chapter 2 of Part 6 (benefits from non-approved pension...
Payments and benefits on termination of employment etc.
42Section 403 (charge on payment or other benefit) does not...
43(1) This paragraph applies for the purpose of determining how...
Part 7Employment income: income related to securities
Pre-6th April 2003 acquisitions
43A(1) This paragraph relates to the operation of section 421E...
Conditional interests in shares
44Chapter 2 of Part 7 , as originally enacted, does...
45(1) This paragraph relates to the operation of section 425...
46(1) This paragraph relates to the operation of section 428...
47. . . . . . . . . ....
48. . . . . . . . . ....
Convertible shares
49Chapter 3 of Part 7 does not apply in relation...
50. . . . . . . . . ....
51. . . . . . . . . ....
52. . . . . . . . . ....
53. . . . . . . . . ....
Post-acquisition benefits from shares
54Chapter 4 of Part 7 , both as originally enacted...
55(1) Chapter 4 of Part 7 , as originally enacted,...
56The removal or variation of a restriction applying to shares...
57Despite the repeals made by this Act—
58(1) This paragraph relates to the operation of section 448...
59. . . . . . . . . ....
60. . . . . . . . . ....
61. . . . . . . . . ....
Securities disposed of for more than market value
61AChapter 3D of Part 7 does not apply in relation...
Share options
62. . . . . . . . . ....
63(1) This paragraph relates to the operation of section 474...
64(1) This paragraph relates to the operation of section 478...
65(1) This paragraph relates to the operation of section 478...
66. . . . . . . . . ....
67. . . . . . . . . ....
Approved share incentive plans
68(1) This paragraph applies where, immediately before 6th April 2003,...
69(1) Any reference in any enactment, instrument or document—
70Nothing in paragraph 91(4) of Schedule 2 to this Act...
Approved SAYE option schemes
71(1) This paragraph applies where, immediately before 6th April 2003,...
72(1) Any reference in the SAYE code to a share...
Approved CSOP schemes
73(1) This paragraph applies where, immediately before 6th April 2003,...
74(1) Any reference in the CSOP code to a share...
75(1) This paragraph has effect where, immediately before 6th April...
76(1) This paragraph applies to any right obtained by an...
Enterprise management incentives
77(1) This paragraph applies where, immediately before 6th April 2003,...
78(1) In section 535 (disqualifying events relating to employee), subsections...
79(1) Section 536 (other disqualifying events) has effect in relation...
80(1) Section 537 (alteration of share capital for purposes of...
81In a case where the qualifying option was granted before...
82(1) This paragraph relates to the operation of section 541(2)...
83In Schedule 5 (enterprise management incentives), paragraph 41(6) (like other...
Employee benefit trusts
84In relation to times before 6th April 2003, section 549(5)...
Part 8Approved profit sharing schemes
Trustees' duty to provide information
85Any obligation imposed in accordance with paragraph 34(b) of Schedule...
Share incentive plans
86(1) Where the trustees of an approved share incentive plan...
Other share schemes: eligibility of individuals and material interests
87(1) In applying any of the provisions specified in sub-paragraph...
Part 9Social security income
Disabled person’s and working families' tax credits
88(1) This paragraph applies if, on 6th April 2003, the...
Part 10PAYE
PAYE regulations
89(1) In relation to any time before the commencement of...
Part 11Consequences for corporation tax
90(1) This paragraph applies where— (a) a company is charged...
91(1) This paragraph applies in relation to corporation tax charged...
92(1) The provisions of this Act mentioned in sub-paragraph (2)...
SCHEDULE 8Repeals and revocations
Part 1Acts of Parliament
Part 2Subordinate legislation

Income Tax (Earnings and Pensions) Act 2003

2003 c. 1

An Act to restate, with minor changes, certain enactments relating to income tax on employment income, pension income and social security income; and for connected purposes.

Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—