Part 7F1Employment income: income and exemptions relating to securities
F2Chapter 2Restricted securities
Pt. 7 Ch. 2 substituted (1.9.2003 with effect in accordance with Sch. 22 para. 3(2)-(4) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 3(1); S.I. 2003/1997, art. 2
Tax exemption on acquisition
425No charge in respect of acquisition in certain cases
1
Subsection (2) applies if the employment-related securities—
a
are restricted securities, or a restricted interest in securities, by virtue of subsection (2) of section 423 (provision for transfer, reversion or forfeiture) at the time of the acquisition, and
b
will cease to be restricted securities, or a restricted interest in securities, by virtue of that subsection within 5 years after the acquisition (whether or not they may remain restricted securities or a restricted interest in securities by virtue of the application of subsection (3) or (4) of that section).
2
No liability to income tax arises in respect of the acquisition, except as provided by—
a
Chapter 3 of this Part (acquisition by conversion),
b
Chapter 3C of this Part (acquisition for less than market value), or
c
Chapter 5 of this Part (acquisition pursuant to securities option).
3
But the employer and the employee may elect that subsection (2) is not to apply to the employment-related securities.
4
An election under subsection (3)—
a
is to be made by agreement by the employer and the employee, and
b
is irrevocable.
5
Such an agreement—
a
must be made in a form approved by the Board of Inland Revenue, and
b
may not be made more than 14 days after the acquisition.
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)