SCHEDULES

SCHEDULE 23Employee shareholder shares

PART 2Capital gains tax exemption for employee shareholder shares

19

1

Section 149AA (restricted and convertible employment-related securities) is amended as follows.

2

In subsection (1) for “Where” substitute “ Subject to subsection (1A), where ”.

3

After that subsection insert—

1A

Where an individual has acquired an asset consisting of shares which, on acquisition, became employee shareholder shares—

a

the consideration for the acquisition is (subject to section 119A) to be taken to be equal to any amount that constituted earnings under Chapter 1 of Part 3 of ITEPA 2003 (earnings) or section 226A of that Act (employee shareholder shares), and

b

no other consideration is to be treated as having been given for the acquisition of the shares.

4

In subsection (2)—

a

for “Subsection (1) above applies” substitute “ Subsections (1) and (1A) apply ”, and

b

for “is” substitute “ are ”.

5

After subsection (6) insert—

6A

For the purposes of subsection (1A)—

  • “employee shareholder share” has the meaning given in section 236B(3) (exemption for employee shareholder shares), and

  • shares are “acquired” by an individual if the individual becomes beneficially entitled to them (and they are so acquired at the time when the individual becomes so entitled).

6

In subsection (7)—

a

for “In subsection (1) the” substitute “ In subsections (1) and (1A) a ”, and

b

after “ITEPA 2003” insert “ or was treated as earnings under section 226A of that Act ”.

7

Accordingly, in the heading for that section, after “securities” insert “ and employee shareholder shares ”.