Finance Act 2003

Income tax position of employee in case of restricted shares U.K.

[F1 20 (1) Where the recipient acquires restricted shares, this paragraph applies in place of paragraph 7 (income tax position of the employee).

(2) It must be the case that the employee —

(a) either—

(i) is subject to a charge to income tax under Chapter 1 of Part 3 of the Income Tax (Earnings and Pensions) Act 2003 in respect of the award, or

(ii) is not subject to such a charge but will be subject to a charge to income tax under the Income Tax (Earnings and Pensions) Act 2003 by virtue of section 426 of that Act on the occurrence of an event in relation to the shares that is a chargeable event for the purposes of that section, or

(b) would be within paragraph (a) if the conditions specified in sub-paragraph (4) were met.

(3) Where but for the death of the employee sub-paragraph (2)(a)(ii) would apply in relation to restricted shares acquired under an award of shares, it is to be treated as applying in relation to the restricted shares.

(4) The conditions mentioned in sub-paragraph (2)(b) are—

(a) that the employee was resident and ordinarily resident in the United Kingdom at all material times, and

(b) that the duties of the employment by reason of which the award was made or the option was granted were performed in the United Kingdom at all material times.]

Textual Amendments

F1 Sch. 23 Pt. 4 substituted (with effect in accordance with Sch. 22 para. 68(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 68(1); S.I. 2003/1997, art. 2