Income Tax (Earnings and Pensions) Act 2003

[F2 226B Deemed payment for employee shareholder shares U.K.

(1) This section applies if shares having a market value of no less than £2000 are acquired by an employee in consideration of an employee shareholder agreement.

(2) Where all the shares acquired in consideration of the agreement are acquired on the same day, the employee is to be treated, for the purposes of this Act, as having made on that day a payment of £2000 for those shares.

(3) Where—

(a) shares are acquired by the employee in consideration of the agreement on more than one day, and

(b) of those shares, shares having a market value of not less than £2000 are acquired on the first of those days,

the employee is to be treated for the purposes of this Act as having made, on the first of those days, a payment of £2000 for the shares acquired on that day.

(4) If the market value of the shares acquired by the employee on the day mentioned in subsection (2) or (3)(b) exceeds £2000, the amount of the payment under subsection (2) or (3) which the employee is to be treated as having made for each of the shares is an amount equal to the appropriate proportion of the market value of that share.

(5) The “appropriate proportion” is the following—

where V is the total market value of the shares acquired by the employee on the day.

(6) This section is subject to—

(a) section 226C (only one payment deemed to be made under agreements with associated companies), and

(b) section 226D (no deemed payment if shareholder or a connected person has a material interest in the company).

(7) Except as provided by this section, for the purposes of this Act the employee is to be treated as having given no consideration for shares acquired in consideration of the agreement.

(8) Section 226A(7) applies for the purposes of this section as it applies for the purposes of section 226A(1).]

Textual Amendments

F2 Ss. 226A-226D and cross-heading inserted (1.9.2013) by Finance Act 2013 (c. 29), Sch. 23 paras. 3, 38; S.I. 2013/1755, art. 2