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Point in time view as at 22/02/2024.
Income Tax (Earnings and Pensions) Act 2003, Chapter 4 is up to date with all changes known to be in force on or before 04 November 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.
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Textual Amendments
F1Pt. 7 Ch. 4 (ss. 447-450) substituted for Pt. 7 Ch. 4 (ss. 447-470) (16.4.2003 with effect in accordance with Sch. 22 para. 9(2)-(4) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 9(1)
(1)This Chapter applies if an associated person receives a benefit [F2in connection with employment-related securities] .
(2)The taxable amount determined under section 448 counts as employment income of the employee for the relevant tax year.
(3)The “relevant tax year” is the tax year in which the benefit is received.
(4)[F3If the benefit is otherwise chargeable to income tax this section does not apply unless something has been done which affects the employment-related securities as part of a scheme or arrangement the main purpose (or one of the main purposes) of which is the avoidance of tax or national insurance contributions.]
(5)This section is subject to section 449 (case outside this Chapter).
Textual Amendments
F2Words in s. 447(1) substituted (with effect in accordance with Sch. 2 para. 18(4) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 18(2)
F3S. 447(4) substituted (with effect in accordance with Sch. 2 para. 18(4) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 18(3)
The taxable amount for the purposes of section 447 (charge on other chargeable benefits) is the amount or market value of the benefit.
(1)This Chapter does not apply if—
(a)the employment-related securities are shares (or an interest in shares) in a company of a class,
(b)a similar benefit is received by the owners of all the company’s shares of the class,
[F4(ba)subsection (1A) is satisfied,] and
(c)subsection (2) or (3) is satisfied.
[F5(1A)This subsection is satisfied unless something which affects the employment-related securities has been done as part of a scheme or arrangement the main purpose (or one of the main purposes) of which is the avoidance of tax or national insurance contributions.]
(2)This subsection is satisfied if, immediately before the receipt of the benefit, the company is employee-controlled by virtue of holdings of shares of the class.
(3)This subsection is satisfied if, immediately before the receipt of the benefit, the majority of the company’s shares of the class are not [F6employment-related securities.]
F7(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Textual Amendments
F4S. 449(1)(ba) inserted (retrospective to 7.5.2004) by Finance Act 2004 (c. 12), ss. 86(2)(d)(3)(8), 86(1)
F5S. 449(1A) substituted (with effect in accordance with Sch. 2 para. 19(2) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 19
F6Words in s. 449(3) substituted (retrospective to 7.5.2004) by Finance Act 2004 (c. 12), ss. 86(2)(d)(5)(8), 86(1)
F7S. 449(4) repealed (with effect in accordance with s. 86(8) of the amending Act) by Finance Act 2004 (c. 12), Sch. 42 Pt. 2(11)
(1)In this Chapter—
“interest”, in relation to shares, and
“shares”,
have the meaning indicated in section 420(8).
(2)In this Chapter “market value” has the meaning indicated in section 421(1).
(3)In this Chapter—
“the employee” (except in section 449), and
“employment-related securities”,
have the meaning indicated in section 421B(8).
(4)In this Chapter “associated person” has the meaning indicated in section 421C.
(5)In this Chapter—
“associated company”, and
“employee-controlled”,
have the meaning indicated in section 421H.]
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Modifications etc. (not altering text)
C1S. 452(1) applied (with effect in accordance with s. 21(1) of the amending Act) by Finance Act 2005 (c. 7), s. 21(2)
C2S. 452(2)(a) applied (with effect in accordance with s. 21(1) of the amending Act) by Finance Act 2005 (c. 7), s. 21(2)
C3S. 452(2)(c)(d) applied (with effect in accordance with s. 21(1) of the amending Act) by Finance Act 2005 (c. 7), s. 21(2)
C4S. 452(2)(c)(d) applied (with effect in accordance with s. 21(1) of the amending Act) by Finance Act 2005 (c. 7), s. 21(2)
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