C1Part 7F6Employment income: income and exemptions relating to securities
Pt. 7: power to modify conferred (7.4.2005) by Finance Act 2005 (c. 7), s. 21(8)-(10)
F2Chapter 4Post-acquisition benefits from securities
Pt. 7 Ch. 4 (ss. 447-450) substituted for Pt. 7 Ch. 4 (ss. 447-470) (16.4.2003 with effect in accordance with Sch. 22 para. 9(2)-(4) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 9(1)
447Charge on other chargeable benefits from securities
1
This Chapter applies if an associated person receives a benefit F1in connection with employment-related securities .
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
F4If the benefit is otherwise chargeable to income tax this section does not apply unless something has been done which affects the employment-related securities as part of a scheme or arrangement the main purpose (or one of the main purposes) of which is the avoidance of tax or national insurance contributions.
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,
F8ba
subsection (1A) is satisfied, and
c
subsection (2) or (3) is satisfied.
F31A
This subsection is satisfied unless something which affects the employment-related securities has been done as part of a scheme or arrangement the main purpose (or one of the main purposes) of which is the avoidance of tax or national insurance contributions.
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 F7employment-related securities.
F54
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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.
Tax charge where restrictions or rights varied
F2451Amount of charge
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F2C5C4C3C2452Cases outside charge under section 449
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Supplementary provisions
F2461Related acquisitions of additional shares
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F2462Company reorganisations etc.
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F2463Disposals of shares to connected persons etc. ignored
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F2464Application to interests in shares
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F2465Duty to notify acquisitions of shares or interests in shares
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F2466Duty to notify chargeable events and chargeable benefits
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Interpretation
F2467Meaning of “dependent subsidiary”
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F2468Meaning of “employee-controlled”
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F2469Shares “held by outside shareholders”
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F2470Minor definitions
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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)