Income Tax (Earnings and Pensions) Act 2003

458 Chargeable benefits

(1) This section applies for the purposes of section 457 (charge on other chargeable benefits from shares).

(2) A benefit received by a person is a “chargeable benefit” if subsection (3), (4) or (5) applies to the benefit.

(3) This subsection applies to a benefit if, at the time when it becomes available, it is available to less than 90% of the persons who then hold shares of the same class as the shares.

(4) This subsection applies to a benefit if, at the time when it is received—

(a) the company is a dependent subsidiary, and

(b) its shares are of a single class.

(5) This subsection applies to a benefit if, at the time when it is received, none of the conditions in subsection (6) is met.

(6) The conditions are—

(a) that the majority of the company’s shares in respect of which the benefit is received are held by outside shareholders;

(b) that the company is employee-controlled by virtue of holdings of shares of the same class as the shares;

(c) that, in a case where the company is a 51% subsidiary which is not a dependent subsidiary, the majority of its shares in respect of which the benefit is received are held otherwise than by or for the benefit of—

(i) directors or employees of the company,

(ii) a company which is an associated company of the company but is not its parent company, or

(iii) directors or employees of a company which is an associated company of the company.

(7) For the purposes of this section—

(a) “the company”, in relation to the shares (see section 457(1)), means the company whose shares they are; and

(b) a company (“P”) is the “parent company” of another company (“S”) if S is a 51% subsidiary of P.