C1Part 7F1Employment income: income and exemptions relating to securities
Pt. 7: power to modify conferred (7.4.2005) by Finance Act 2005 (c. 7), s. 21(8)-(10)
Chapter 6Approved share incentive plans
Tax advantages connected with award of shares
490No charge on award or acquisition of shares: general
1
This section applies—
a
on the award to an employee of free, matching or partnership shares under the plan, or
b
on the acquisition on behalf of an employee of dividend shares under the plan.
2
The employee is not liable to income tax on the value of the beneficial interest in the shares that passes to the employee at the time of the award or acquisition.
F2491No charge on award of shares as taxable benefit
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492No charge on partnership share money deducted from salary
1
An employee is not liable to income tax under Part 2 on any amount of the employee’s salary which is deducted as partnership share money under a partnership share agreement.
2
But the deduction of partnership share money is to be disregarded for the purpose of ascertaining—
a
the amount of the employee’s remuneration for the purposes of Chapter 1 of Part 14 of ICTA (retirement benefit schemes), or
b
the amount of the employee’s relevant earnings for the purposes of Chapter 3 or 4 of that Part of that Act (retirement annuities or personal pension schemes).
493No charge on acquisition of dividend shares
F41
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F42
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3
Section 234A(4) of ICTA (information relating to distributions to be provided by nominee) does not apply to any amount applied by the trustees in acquiring dividend shares on behalf of a participant.
F33A
For the exemption of such amounts from income tax, see section 770 of ITTOIA 2005 (amounts applied by SIP trustees acquiring dividend shares or retained for reinvestment).
F54
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5
Subsection (3) is subject to paragraph 80(4)(c) of Schedule 2 (information required where dividend shares cease to be subject to plan).
Pt. 7 heading substituted (with effect in accordance with Sch. 22 para. 2(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 2(1)