SCHEDULE 22Employee securities and options
Main provisions
9
(1)
“Chapter 4Post-acquisition benefits from securities
447Charge on other chargeable benefits from securities
(1)
This Chapter applies if an associated person receives a benefit by virtue of the ownership of employment-related securities by that person or another associated person.
(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)
This section does not apply if the benefit is otherwise chargeable to income tax.
(5)
This section is subject to section 449 (case outside this Chapter).
448Amount of charge
The taxable amount for the purposes of section 447 (charge on other chargeable benefits) is the amount or market value of the benefit.
449Case outside this Chapter
(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, and
(c)
subsection (2) or (3) is satisfied.
(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 held by or for the benefit of any of the following—
(a)
employees of the company,
(b)
persons who are related to an employee of the company,
(c)
associated companies of the company,
(d)
employees of any associated company of the company, or
(e)
persons who are related to an employee of any such associated company.
(4)
For the purposes of subsection (3) a person is related to an employee if—
(a)
the person acquired the shares pursuant to a right or opportunity available by reason of the employee’s employment, or
(b)
the person is connected with a person who so acquired the shares or with the employee and acquired the shares otherwise than by or under a disposal made by way of a bargain at arm’s length from the employee or another person who is related to the employee.
450Definitions
(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.”.
(2)
Subject to sub-paragraph (3), sub-paragraph (1) has effect on and after 16th April 2003 (so that it applies on and after that date in relation to employment-related securities irrespective of the date of the acquisition).
(3)
The provisions of Chapter 4 as originally enacted which are mentioned in sub-paragraph (4)—
(a)
continue to apply in relation to shares, and interests in shares, acquired before 16th April 2003, and
(b)
apply in relation to shares, and interests in shares, acquired on or after that date until the day appointed under paragraph 3(2).
In this sub-paragraph “” means shares in a company or securities as defined in section 254(1) of the Taxes Act 1988 issued by a company.
(4)
The provisions are—
section 450(1), (2), (3)(a), (4), (5) and (6)(a), and
sections 447 to 449, section 451, section 452(1) to (3), section 461(1) and (2), section 462, sections 464 to 466 and sections 468 to 470, so far as relevant for the purposes of those provisions of section 450 (or the other provisions mentioned in this subsection so far as so relevant).