Income Tax (Earnings and Pensions) Act 2003

[^key-57de0420d802ca5ddb3b8863fa7e8506]: Words in s. 698(8) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(14)

[^key-5c893efc1fc32d39ed47a4b3ecb1e383]: Words in s. 700(7) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(15)

[^key-61ba2f8acfce4aa493ad661a690376d2]: Words in Sch. 2 para. 48(2) inserted (20.3.2025) by Finance Act 2025 (c. 8), s. 36(3)

[^key-96e7802932dd387a2231cd15fe05b4a8]: S. 707A inserted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2024 (c. 3), s. 36(4)(5)

[^key-0835338be01be3d6451260a2a6369101]: S. 139(1) Table substituted (for the tax year 2025-26) by Finance Act 2023 (c. 1), s. 11(1)(2)

[^key-5bdf3c93ba984cb8352c85b6e0e78603]: Word in s. 139(3)(a) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2023 (c. 1), s. 11(3)(4)

[^key-3f7cf97d8856d3983b9096a275105fcf]: Sum in s. 150(1) substituted (with application to tax year 2025-26 and subsequent tax years) by The Van Benefit and Car and Van Fuel Benefit Order 2024 (S.I. 2024/1349), arts. 1(2), 2(2)

[^key-c414791c86d301624ecd70945ed5fc29]: Sum in s. 155(1B)(b) substituted (with application to tax year 2025-26 and subsequent tax years) by The Van Benefit and Car and Van Fuel Benefit Order 2024 (S.I. 2024/1349), arts. 1(2), 2(3)

[^key-33c4dd1d26830eab53e72b65551de75d]: Sum in s. 161(b) substituted (6.4.2025 with application to tax year 2025-26 and subsequent tax years) by The Van Benefit and Car and Van Fuel Benefit Order 2024 (S.I. 2024/1349), arts. 1(2), 2(4)

[^key-75c713d5adae15bc6b95b0540080e1d7]: Sch. 6 paras. 228-230 repealed (29.4.2013 for specified purposes, 1.7.2013 and 29.7.2013 for specified purposes, 28.10.2013 for specified purposes, 25.11.2013 for specified purposes, 24.2.2014 and 7.4.2014 for specified purposes, 23.6.2014 and further specified dates for specified purposes, 15.9.2014 and further specified dates for specified purposes, 26.11.2014 for specified purposes, 28.1.2015 for specified purposes, 16.2.2015 and further specified dates for specified purposes, 18.3.2015 and further specified dates for specified purposes, 21.9.2015 and further specified dates for specified purposes, 2.12.2015 for specified purposes, 27.1.2016 and 24.2.2016 for specified purposes, 23.3.2016 and 27.4.2016 for specified purposes, 1.2.2019 for specified purposes, 1.12.2025 for specified purposes) by Welfare Reform Act 2012 (c. 5), s. 150(3), Sch. 14 Pt. 1; S.I. 2013/983, arts. 4(1)(c), 5, Sch. 1 (with arts. 6, 9(1), 22, Sch. 4) (as amended: (1.7.2013) by S.I. 2013/1511; (29.10.2013) by S.I. 2013/2657; (16.6.2014) by S.I. 2014/1452; (30.6.2014) by S.I. 2014/1661; (28.7.2014) by S.I. 2014/1923; (15.9.2014) by S.I. 2014/2321; (17.11.2014) by S.I. 2014/3067; (21.11.2014) by S.I. 2014/3094; (19.1.2015) by S.I. 2015/32 (as amended (10.2.2015) by S.I. 2015/101); (10.3.2015) by S.I. 2015/634; (20.7.2015) by S.I. 2015/1537; (23.11.2015) by S.I. 2015/1930; (6.4.2017) by S.I. 2017/483; (2.2.2018) by S.I. 2018/138; (16.1.2019) by S.I. 2019/10; (31.1.2019) by S.I. 2019/167; (30.3.2022) by S.I. 2022/302; and (25.7.2022) by S.I. 2022/752); S.I. 2013/1511, art. 4 (as amended: (29.10.2013) by S.I. 2013/2657; (16.6.2014) by S.I. 2014/1452; (30.6.2014) by S.I. 2014/1661; (28.7.2014) by S.I. 2014/1923; (17.11.2014) by S.I. 2014/3067; (19.1.2015) by S.I. 2015/32; (10.3.2015) by S.I. 2015/634; and (20.7.2015) by S.I. 2015/1537); S.I. 2013/2657, art. 4 (with art. 6) (as amended: (16.6.2014) by S.I. 2014/1452; (30.6.2014) by S.I. 2014/1661; (28.7.2014) by S.I. 2014/1923; (17.11.2014) by S.I. 2014/3067; (19.1.2015) by S.I. 2015/32; (10.3.2015) by S.I. 2015/634; and (20.7.2015) by S.I. 2015/1537); S.I. 2013/2846, art. 4 (with art. 5) (as amended: (16.6.2014) by S.I. 2014/1452; (30.6.2014) by S.I. 2014/1661; (28.7.2014) by S.I. 2014/1923; (17.11.2014) by S.I. 2014/3067; (19.1.2015) by S.I. 2015/32; (10.3.2015) by S.I. 2015/634; and (20.7.2015) by S.I. 2015/1537); S.I. 2014/209, art. 4 (as amended: (16.6.2014) by S.I. 2014/1452; (30.6.2014) by S.I. 2014/1661; (28.7.2014) by S.I. 2014/1923; (17.11.2014) by S.I. 2014/3067; (19.1.2015) by S.I. 2015/32; (10.3.2105) by S.I. 2015/634; and (20.7.2015) by S.I. 2015/1537); S.I. 2014/1583, art. 4 (as amended (30.6.2014) by S.I. 2014/1661; (28.7.2014) by S.I. 2014/1923; (17.11.2014) by S.I. 2014/3067; (19.1.2015) by S.I. 2015/32; (10.3.2015) by S.I. 2015/634; and (20.7.2015) by S.I. 2015/1537); S.I. 2014/2321, art. 4 (as amended: (17.11.2014) by S.I. 2014/3057; (19.1.2015) by S.I. 2015/32; (10.3.2015) by S.I. 2015/634; and (20.7.2015) by S.I. 2015/1537); S.I. 2014/3094, art. 4 (with art. 6) (as amended (25.7.2022) by S.I. 2022/752); S.I. 2015/33, art. 4 (with art. 6) (as amended: (11.2.2015) by S.I. 2015/101; (10.3.2015) by S.I. 2015/634; (6.4.2017) by S.I. 2017/483; (11.4.2018) by S.I. 2018/138; (16.1.2019) by S.I. 2019/10; (15.1.2019) by S.I. 2019/37); (31.1.2019) by S.I. 2019/167; (30.3.2022) by S.I. 2022/302; and (25.7.2022) by S.I. 2022/752); S.I. 2015/101, art. 4 (as amended (10.3.2015) by S.I. 2015/534; (17.3.2015) by S.I. 2015/740; and (20.7.2015) by S.I. 2015/1537); S.I. 2015/634, art. 4 (with art. 6) (as amended: (17.3.2015) by S.I. 2015/740; (6.4.2017) by S.I. 2017/376; (16.1.2019) by S.I. 2019/10; (15.1.2019) by S.I. 2019/37; (31.1.2019) by S.I. 2019/167; (30.3.2022) by S.I. 2022/302; and (25.7.2022) by S.I. 2022/752); S.I. 2015/1537, art. 4 (as modified (23.11.2015) by S.I. 2015/1930, art. 6); S.I. 2015/1930, art. 4; S.I. 2016/33, art. 4; S.I. 2016/407, art. 4; S.I. 2019/167, art. 4(5)-(7) (with art. 4(8)-(12)); S.I. 2025/1148, art. 2 (with art. 3)

[^key-fbd9d8c8fa11ed049630df43b02ab517]: Sch. 6 paras. 233-235 repealed (27.9.2017 for specified purposes, 15.11.2017 and 13.12.2017 for specified purposes, 17.1.2018 and further specified dates for specified purposes, 16.5.2018 and further specified dates for specified purposes, 5.9.2018 and further specified dates for specified purposes, 1.2.2019 for specified purposes, 1.12.2025 for specified purposes) by The Welfare Reform (Northern Ireland) Order 2015 (S.I. 2015/2006), art. 2(2), Sch. 12 Pt. 1; S.R. 2017/190, art. 6, Sch. 2 (with arts. 7, 8, 10-25, Sch. 3); S.R. 2017/216, art. 4 (with art. 5); S.R. 2018/1, art. 4 (with art. 5); S.R. 2018/97, art. 4 (with art. 5); S.R. 2018/138, art. 4 (with art. 5); S.R. 2019/7, art. 2(5)-(7) (with art. 2(8)-(12)); S.R. 2025/176, art. 2 (with art. 3)

[^key-742b892f52135f151f3496c18705a6a6]: Words in s. 658(4) substituted (15.3.2026) by The Income Tax (Tax Treatment of Scottish Carer Supplement and Exemption of Carer’s Additional Person Payment) Regulations 2026 (S.I. 2026/93), regs. 1, 2(2)

[^key-5dfbf22efc5897a97d86b2d5ec39dedd]: Words in s. 660(1) Table A inserted (15.3.2026) by The Income Tax (Tax Treatment of Scottish Carer Supplement and Exemption of Carer’s Additional Person Payment) Regulations 2026 (S.I. 2026/93), regs. 1, 2(3)

[^key-d673b656aabc6e951f6418ae7e36162e]: Words in s. 661(1) inserted (15.3.2026) by The Income Tax (Tax Treatment of Scottish Carer Supplement and Exemption of Carer’s Additional Person Payment) Regulations 2026 (S.I. 2026/93), regs. 1, 2(4)

[^key-cf544e19a6f0a7806d8a93ac913711bc]: Words in s. 677(1) Table B Pt. 2 inserted (15.3.2026) by The Income Tax (Tax Treatment of Scottish Carer Supplement and Exemption of Carer’s Additional Person Payment) Regulations 2026 (S.I. 2026/93), regs. 1, 2(5)

General

Interpretation of Chapters 1 to 5

421A

• (1) This section applies for determining for the purposes of Chapters 2 to 5 the amount of the consideration given for anything.

• (2) If any consideration is given partly in respect of one thing and partly in respect of another, the amount given in respect of the different things is to determined on a just and reasonable apportionment.

• (3) The consideration which is taken to be given wholly or partly for anything does not include the performance of any duties of, or in connection with, an employment.

• (4) No amount is to be counted more than once in calculating the amount of any consideration.

Application of Chapters 2 to 4A

421B

• (1) Subject as follows (and to any provision contained in Chapters 2 to 4A ) those Chapters apply to securities, or an interest in securities, acquired by a person where the right or opportunity to acquire the securities or interest is available by reason of an employment of that person or any other person.

• (2) For the purposes of subsection (1)—

• (a) securities are, or an interest in securities is, acquired at the time when the person acquiring the securities or interest becomes beneficially entitled to those securities or that interest (and not, if different, the time when the securities are, or interest is, conveyed or transferred), and

• (b) “employment” includes a former or prospective employment.

• (3) A right or opportunity to acquire securities or an interest in securities made available by a person’s employer, or by a person connected with a person’s employer, is to be regarded for the purposes of subsection (1) as available by reason of an employment of that person unless—

• (a) the person by whom the right or opportunity is made available is an individual, and

• (b) the right or opportunity is made available in the normal course of the domestic, family or personal relationships of that person.

• (4) Chapters 2 to 4A cease to apply to securities, or an interest in securities, when subsection (5), (6) or (7) is satisfied.

• (5) This subsection is satisfied immediately after the securities are, or the interest in securities is, disposed of otherwise than to an associated person.

• (6) This subsection is satisfied immediately before the death of the employee.

• (7) This subsection is satisfied 7 years after the first date after the acquisition on which the employee is an employee of none of the following—

• (a) the employer,

• (b) (if the securities are, or the interest in securities is an interest in, securities issued by a company) the company by which they are issued, or

• (c) a person connected with a person within paragraph (a) or (b).

• (8) In this Chapter and Chapters 2 to 4A —

• “the acquisition”, in relation to employment-related securities, means the acquisition of the employment-related securities pursuant to the right or opportunity available by reason of the employment,

• “the employment”, in relation to employment-related securities, means the employment by reason of which the right or opportunity to acquire the employment-related securities is available (“the employee” and “the employer” being construed accordingly unless otherwise indicated), and

• “employment-related securities” means securities or an interest in securities to which Chapters 2 to 4 apply (ignoring any provision of any of those Chapters which limits the application of the Chapter to a particular description or descriptions of employment-related securities).

421C

• (1) For the purposes of this Chapter and Chapters 2 to 4 the following are “associated persons” in relation to employment-related securities—

• (a) the person who acquired the employment-related securities on the acquisition,

• (b) (if different) the employee, and

• (c) any relevant linked person.

• (2) A person is a relevant linked person if—

• (a) that person (on the one hand), and

• (b) either the person who acquired the employment-related securities on the acquisition or the employee (on the other),

are or have been connected or (without being or having been connected) are or have been members of the same household.

• (3) But a company which would otherwise be a relevant linked person is not if it is—

• (a) the employer,

• (b) the person from whom the employment-related securities were acquired,

• (c) the person by whom the right or opportunity to acquire the employment-related securities was made available, or

• (d) the person by whom the employment-related securities (or the securities in which they are an interest) were issued.

421D

• (1) Subsections (2) and (3) apply where an associated person is entitled to employment-related securities (the “original securities”) and either—

• (a) as a result of the conversion of the original securities (or the securities in which they are an interest), or of any other transaction or series of transactions, that person ceases to be entitled to the original securities but that person or another associated person acquires securities or an interest in securities (the “replacement securities”), or

• (b) by virtue of that person being entitled to the original securities, that person or another associated person acquires other securities or an interest in other securities (the “additional securities”).

• (2) The replacement securities or the additional securities are to be regarded for the purposes of section 421B(1) (securities acquired pursuant to a right or opportunity available by reason of an employment) as acquired pursuant to the same right or opportunity as the original securities.

• (3) Where the market value of the original securities is reduced by reason of the issue of, or of securities including, the replacement securities or the additional securities (or the securities in which they are an interest), the amount of that reduction is to be treated for the purposes of Chapters 2 and 3 as consideration or additional consideration given for the acquisition of the replacement securities or the additional securities and for the purposes of Chapter 3C as a payment made for their acquisition at or before the time of the acquisition.

• (4) Subsections (2) and (3) apply whether or not the replacement securities, or the additional securities, were acquired for consideration or a payment was made for their acquisition at or before the time of the acquisition.

• (5) Where Chapters 2 to 4A apply to an interest in securities, an increase of that interest is to be treated for the purposes of section 421B(1) (securities acquired pursuant to a right or opportunity available by reason of an employment) as a separate interest acquired pursuant to the same right or opportunity as the original interest.

• (6) Where Chapters 2 to 4A apply to an interest in securities, a reduction of that interest (otherwise than by a disposal to an associated person) is to be treated for the purposes of those Chapters as the disposal otherwise than to an associated person of a separate interest proportionate to the reduction.

421E

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

421F

• (1) Chapters 2, 3 and 3C do not apply in relation to employment-related securities that are shares acquired under the terms of an offer to the public or an interest in shares so acquired.

• (1A) But subsection (1) does not disapply those Chapters if the main purpose (or one of the main purposes)—

• (a) of the arrangements under which the right or opportunity under which the shares were acquired, or

• (b) for which the shares are held,

is the avoidance of tax or national insurance contributions.

• (2) In a case within subsection (1) of section 544 (exemption for priority share allocations where offer to employees separate from public offer), any acquisition made under the terms of either the public offer or the employee offer within the meaning of that subsection is to be treated for the purposes of this section as made under the terms of an offer to the public.

• (3) Subsection (2) applies whether or not there is any benefit within section 544(2) (benefit derived from entitlement to priority allocation exempt from income tax).

421G

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

421H

• (1) For the purposes of Chapters 2 to 4 a company is “employee-controlled” by virtue of shares of a class if—

• (a) the majority of the company’s shares of that class (other than any held by or for the benefit of an associated company) are held by or for the benefit of employees of the company or a company controlled by the company, and

• (b) those employees are together able as holders of the shares to control the company.

In this subsection “employee” includes a person who is to be or has been an employee.

• (2) In this section and Chapters 2 to 4 “associated company” has the meaning given by section 449 of CTA 2010.

421I

• (1) This section applies for determining for the purposes of Chapters 2 to 3A the amount of the consideration given for the acquisition of employment-related securities.

• (2) References to consideration given for the acquisition of the employment-related securities are to consideration given by—

• (a) the employee, or

• (b) (if not the employee) the person by whom the employment-related securities were acquired.

• (3) The amount of the consideration given by a person for the acquisition of the employment-related securities includes the amount of any consideration given for a right to acquire the employment-related securities.

• (4) If the right to acquire the employment-related securities (“the new option”) is the whole or part of the consideration for the assignment or release of another right to acquire them (“the old option”), the amount of the consideration given for the new option is to be treated as being the sum of—

• (a) the amount by which the amount of the consideration given for the old option exceeds the amount of any consideration for the assignment or release of the old option, apart from the new option, and

• (b) any valuable consideration given for the new option, apart from the old option.

• (5) Two or more transactions are to be treated for the purposes of subsection (4) as a single transaction by which a right to acquire the employment-related securities is assigned for a consideration which consists of or includes another right to acquire the employment-related securities if—

• (a) the transactions result in a person ceasing to hold a right to acquire the employment-related securities and that person or a connected person coming to hold another right to acquire them, and

• (b) one or more of the transactions is effected under arrangements to which two or more persons who hold rights to acquire the employment-related securities, in respect of which there may be a liability to tax under Chapter 5 of this Part (securities options), are parties.

• (6) Subsection (5) applies regardless of the order in which the assignment and the acquisition occur.

• (7) In this section “release”, in relation to a right to acquire the employment-related securities, includes agreeing to the restriction of the exercise of the right.

Information

421J

• (1) This section applies in relation to reportable events.

• (2) Section 421K explains what are reportable events for the purposes of this section.

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) An officer of Revenue and Customs may by notice require any person to provide the officer with such particulars of any reportable events—

• (a) which take place in a period specified in the notice, and

• (b) in relation to which that person is a responsible person,

as are required by the notice or, if no reportable event in relation to which that person is a responsible person has taken place in that period, to state that fact.

• (5) A notice under subsection (4) must specify a date by which it must be complied with.

• (6) That date must not be less than 30 days after the date when the notice is given.

• (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (9) Section 421L explains who are the responsible persons in relation to a reportable event.

• (10) The particulars required by a notice under this section must be provided in a form specified by the Commissioners for Her Majesty’s Revenue and Customs.

• (11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

421K

• (1) This section applies for the purposes of sections 421J and 421JA (duties to provide information and annual returns).

• (2) Each of the events mentioned in subsection (3) is a reportable event.

• (3) The events are—

• (a) an acquisition (or an event treated as an acquisition) of securities, an interest in securities or a securities option pursuant to a right or opportunity available by reason of the employment of the person who acquires the securities, interest in securities or securities option or of any other person,

• (b) an event which is a chargeable event in relation to securities, or an interest in securities, for the purposes of section 426 (chargeable events in relation to restricted securities and restricted interests in securities),

• (c) an event which is a chargeable event in relation to securities, or an interest in securities, for the purposes of section 438 (chargeable events in relation to convertible securities and interests in convertible securities),

• (d) the doing of anything which gives rise to a taxable amount counting as employment income under section 446L (artificial enhancement of market value of securities),

• (e) an event which discharges a notional loan relating to securities, or an interest in securities, under section 446U (securities and interests in securities acquired for less than market value),

• (f) a disposal of securities, or an interest in securities, by virtue of which Chapter 3D of this Part applies (securities and interests in securities disposed of for more than market value),

• (g) the receipt of a benefit which gives rise to a taxable amount counting as employment income under section 447 (charge on benefit from securities or interest in securities) or would give rise to such an amount but for Chapter 4A (shares in research institution spin-out companies),

• (h) the assignment or release of a securities option acquired pursuant to a right or opportunity available by reason of the employment of the person who acquires the securities option or any other person, and

• (i) the receipt of a benefit in money or money’s worth which is (or by virtue of section 477(6) is to be regarded as being) received in connection with such a securities option.

421L

• (1) This section applies for the purposes of sections 421J and 421JA (duties to provide information and annual returns) .

• (2) Each of the following persons is a responsible person in relation to a reportable event.

• (3) The persons are—

• (a) the employer in question,

• (b) any host employer of the employee in question,

• (ba) if the employee in question is a continental shelf worker and PAYE regulations do not apply to the employer in question, any person who is a relevant person in relation to the employee in question,

• (c) the person from whom the securities in question were, or interest or option in question was, acquired, and

• (d) in relation to a reportable event concerning securities or an interest in securities which are not excluded securities, the person by whom the securities were issued.

• (4) In subsection (3)(b) “host employer” means a person other than the employer in question—

• (a) for whom the employee in question works at the time of the reportable event, and

• (b) who would, by virtue of subsection (2) of section 689 (employees of non-UK employers working for a person other than the employer), be treated for the purposes of PAYE regulations as making a payment of PAYE income of the employee in question if a payment to which subsection (5) would apply were made by the employer in question in respect of the period during which the employee works for the other person.

• (5) For the purposes of subsection (4)(b) this subsection would apply to a payment if—

• (a) it were a payment of PAYE income of the employee, and

• (b) the conditions in subsection (1)(c) and (d) of section 689 were satisfied in relation to the payment.

• (5A) In subsection (3)(ba) “continental shelf worker” and “relevant person” have the meaning given by section 689A(11) (PAYE: oil and gas workers on the continental shelf).

• (6) For the purposes of subsection (3)(d) securities are excluded securities in relation to a reportable event if they are—

• (a) loan stock, bonds or other instruments creating or acknowledging indebtedness issued by or on behalf of any national or regional government or local authority (in the United Kingdom or elsewhere) or any body whose members consists of states, national or regional governments or local authorities, or

• (b) securities which are issued by a person who, at the time of the reportable event, is not connected with the employer in question and which are listed on a recognised stock exchange or dealt in on any designated market in the United Kingdom.

• (7) In subsection (6)(b) “designated” means designated by an order made by the Commissioners for Her Majesty's Revenue and Customs for the purposes of that provision.

• (8) An order under subsection (7) may—

• (a) designate a market by name or by reference to any class or description of market, and

• (b) vary or revoke a previous order under that subsection.

The list price of a car

Chapter 3A — Securities with artificially depressed market value

Introduction

Modification of provisions where car temporarily replaced

446A

• (1) This Chapter applies in certain cases where the market value of employment-related securities (or other relevant securities or interests in securities) is reduced by things done otherwise than for genuine commercial purposes.

• (2) The following are among the things that are, for the purposes of this Chapter, done otherwise than for genuine commercial purposes—

• (a) anything 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, and

• (b) any transaction between companies which are members of the same group on terms which are not such as might be expected to be agreed between persons acting at arm’s length (other than a payment for group relief).

• (3) In subsection (2)(b)—

• (a) “group” means a company and its 51% subsidiaries, and

• (b) “group relief” has the same meaning as in section 183(1) of CTA 2010.

Tax charge on acquisition

446B

• (1) This section applies where the market value of employment-related securities at the time of the acquisition has been reduced by at least 10% as a result of things done otherwise than for genuine commercial purposes within the period of 7 years ending with the acquisition.

• (2) The taxable amount determined under section 446C counts as employment income of the employee for the tax year in which the acquisition occurs.

• (3) But this section does not apply if section 425(2) (no charge on acquisition of certain restricted securities or restricted interests in securities) applies in relation to the employment-related securities.

• (4) This section does not affect any liability to income tax arising in respect of the acquisition of the employment-related securities under—

• (a) Chapter 1 of Part 3 (earnings),

• (b) Chapter 10 of Part 3 (taxable benefits: residual liability to charge),

• (ba) section 226A (employee shareholder shares: amount treated as earnings),

• (c) Chapter 3 of this Part (acquisition by conversion),

• (d) Chapter 3C of this Part (acquisition for less than market value), ...

• (e) Chapter 5 of this Part (acquisition pursuant to securities option) , or

• (f) Chapter 2 of Part 7A (employment income provided through third parties)

How to determine the “appropriate percentage”

446C

• (1) The taxable amount for the purposes of section 446B (charge on acquisition) is—

$FMV-MV$

• (2) FMV is what would be the market value of the employment-related securities at the time of the acquisition if the things mentioned in section 446B(1) had not been done.

• (3) MV is the actual market value of the employment-related securities at the time of the acquisition.

• (4) But where what would be MV is less than the amount of any consideration given for the acquisition of the employment-related securities, MV is the amount of that consideration.

• (4A) Subsection (4B) applies if, prior to the acquisition, the employment-related securities were the subject of a relevant step within the meaning of Part 7A by reason of which Chapter 2 of that Part applied in respect of the employment.

• (4B) If what would be MV in accordance with subsection (3) or (4) (as the case may be) is less than the amount that counted as employment income of the employee in respect of the employment under Chapter 2 of Part 7A, MV is the amount of that employment income instead of the amount determined in accordance with subsection (3) or (4).

• (5) This section is subject to section 446D (restricted securities and convertible securities).

Meaning of car with or without a CO2 emissions figure

446D

• (1) Where the employment-related securities are restricted securities or a restricted interest in securities, FMV (but not MV) is to be determined as if the employment-related securities were not restricted securities or a restricted interest in securities; and, accordingly, sections 426 to 431 (post-acquisition charges on restricted securities) do not apply to the employment-related securities.

• (2) Where the employment-related securities are convertible securities or an interest in convertible securities, FMV and MV are to be determined as if they were not.

Other tax charges

446E

• (1) This section applies where the market value of employment-related securities which are restricted securities or a restricted interest in securities is artificially low—

• (a) immediately after an event which is a chargeable event in relation to the employment-related securities for the purposes of section 426 (charge on restricted securities),

• (aa) immediately before the employment-related securities are disposed of (in circumstances which do not constitute such an event) or are cancelled without being disposed of, or

• (b) on 5th April in any year.

• (2) The market value of the employment-related securities is artificially low where it has been reduced by at least 10% as a result of things done otherwise than for genuine commercial purposes within the relevant period.

• (3) “The relevant period”is the period beginning—

• (a) if section 425(2) (no charge on acquisition of certain restricted securities or restricted interests in securities) applied in relation to the employment-related securities, 7 years before the acquisition, and

• (b) in any other case, 7 years before the relevant date,

and ending with the relevant date.

• (4) “The relevant date”is—

• (a) in a case within subsection (1)(a), the date on which the chargeable event concerned occurs,

• (b) in a case within subsection (1)(aa), the date on which the disposal or cancellation concerned occurs, and

• (c) in a case within subsection (1)(b), the 5th April concerned.

• (5) Where this section applies in a case within subsection (1)(aa) or (b), a chargeable event within section 427(3)(a) (lifting of restrictions) is to be treated as occurring in relation to the employment-related securities on the relevant date.

• (6) In every case where this section applies, subsection (1) of section 428 (amount of charge on restricted securities) applies as if the reference in subsection (2) of that section to what would be the market value of the employment-related securities immediately after the chargeable event but for any restrictions were to what would be their market value at the appropriate time but for the matters to be disregarded.

• (7) “The appropriate time”is—

• (a) in a case within subsection (1)(a) or (b), the time immediately after the chargeable event concerned, and

• (b) in a case within subsection (1)(aa), the time immediately before the chargeable event concerned.

• (8) “The matters to be disregarded” are—

• (a) any restrictions,

• (b) the things done as mentioned in subsection (2), and

• (c) if the employment-related securities are about to be disposed of or cancelled, that fact.

• (9) Where this section applies in a case within subsection (1)(aa), section 428(1) applies with the omission of the reference to OP.

• (10) Where this section applies in a case within subsection (1)(a) and the chargeable event concerned is within section 427(3)(c) (disposal for consideration), section 428 applies with the omission of subsection (9) (case where consideration is less than actual market value).

Van fuel: reduction of cash equivalent

446F

• (1) This section applies where the market value of an employee’s interest in shares which is only conditional is artificially low immediately after a chargeable event relating to the shares under section 427 as originally enacted.

• (2) The market value of the shares is artificially low where it has been reduced by at least 10% as a result of things done otherwise than for genuine commercial purposes within the period beginning—

• (a) 7 years before the chargeable event, or

• (b) with 16th April 2003,

whichever is later.

• (3) There is a chargeable event in relation to shares if section 427 (as originally enacted) applies in relation to them.

• (4) The reference in the definition of MV in section 428(1) (as originally enacted) to the market value of the employee’s interest is to what would be the market value but for the reduction as a result of the things done as mentioned in subsection (2).

• (5) Expressions used in this section and in Chapter 2 of this Part as originally enacted have the same meaning in this section as in that Chapter.

Cash equivalent of the benefit of a van

446G

• (1) This section applies where the market value of employment-related securities which are convertible securities or an interest in convertible securities (determined as if they were not) has been reduced by at least 10% as a result of things done otherwise than for genuine commercial purposes within the period of 7 years ending with the acquisition.

• (2) The reference to the market value of the employment-related securities in the definition of NCMV in section 442(5) (value of convertible securities at time of acquisition) is to what would be the market value but for the reduction as a result of the things done as mentioned in subsection (1) (and but for the fact that they are convertible securities or an interest in convertible securities).

Meaning of “shared van”

446H

• (1) This section applies where the market value of securities (“the converted securities”) into which employment-related securities (or securities in which employment-related securities are an interest) are converted is artificially low at the time of an event which is a chargeable event in relation to the employment-related securities by virtue of section 439(3)(a) (conversion).

• (2) The market value of the converted securities is artificially low where it has been reduced by at least 10% as a result of things done otherwise than for genuine commercial purposes within the period of 7 years ending with the chargeable event.

• (3) The references to the market value of the converted securities in the definition of CMVCS in section 441(6) (amount of gain realised by conversion) are to what would be the market value but for the reduction as a result of the things done as mentioned in subsection (2).

Van fuel: reduction of cash equivalent

446I

• (1) This section applies where any consideration or benefit mentioned in—

• (a) section 428(9) (consideration on disposal of restricted securities),

• (b) section 441(4), (5) or (9) (consideration for disposal of convertible securities or release of entitlement to convert or benefit received in respect of entitlement to convert),

• (c) section 446C(4) (securities with artificially depressed market value: MV to be amount of consideration),

• (d) sections 446X and 446Y(3) (consideration for disposal of securities exceeding market value), or

• (e) section 448 (securities benefit not otherwise subject to tax),

consists (in whole or in part) in the provision of securities or an interest in securities the market value of which is artificially low.

• (2) The market value of any securities or interest in securities is artificially low where it has been reduced by at least 10% as a result of things done otherwise than for genuine commercial purposes within the period of 7 years ending with the receipt of the consideration or benefit.

• (3) The market value of the consideration or benefit consisting in the provision of the securities or interest in securities is for the purposes of the provision or provisions concerned to be taken to be what it would be but for the reduction as a result of the things done as mentioned in subsection (2).

Supplementary

Cost of the benefit: transfer of used or depreciated asset

446J

• (1) In this Chapter—

• “interest”, in relation to securities, and

• “securities”,

• have the meaning indicated in section 420.

• (2) In this Chapter “market value” has the meaning indicated in section 421(1).

• (3) For the purposes of this Chapter sections 421(2) and 421A apply for determining the amount of the consideration given for anything and section 421I applies for determining the amount of the consideration given for the acquisition of employment-related securities.

• (4) In this Chapter—

• “the acquisition”,

• “the employee”, and

• “employment-related securities”,

• have the meaning indicated in section 421B(8).

• (5) In this Chapter—

• “restricted interest in securities”, and

• “restricted securities”,

• have the same meaning as in Chapter 2 of this Part (see sections 423 and 424).

• (6) In this Chapter “restriction” has the same meaning as in Chapter 2 of this Part (see section 432(8)).

• (7) In this Chapter “convertible securities” has the same meaning as in Chapter 3 of this Part (see section 436).

Chapter 3B — Securities with artificially enhanced market value

Introduction

446K

• (1) This Chapter applies in certain cases where the market value of employment-related securities is increased by things done otherwise than for genuine commercial purposes.

• (2) The following are among the things that are, for the purposes of this Chapter, done otherwise than for genuine commercial purposes—

• (a) anything 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, and

• (b) any transaction between companies which are members of the same group on terms which are not such as might be expected to be agreed between persons acting at arm’s length (other than a payment for group relief).

• (3) In subsection (2)(b)—

• (a) “group” means a company and its 51% subsidiaries, and

• (b) “group relief” has the same meaning as in section 183(1) of CTA 2010.

• (4) In this Chapter, in relation to the market value of the employment-related securities—

• “non-commercial increase” means an increase in the market value as a result of anything done otherwise than for genuine commercial purposes, and

• “non-commercial reduction” means a reduction in the market value as a result of anything done otherwise than for genuine commercial purposes.

Charge on non-commercial increases

446L

• (1) This section applies in relation to employment-related securities where on a date that is the valuation date in relation to a relevant period IMV is at least 10% greater than MV.

• (2) The taxable amount determined under subsection (4) counts as employment income of the employee for the relevant tax year (but subject to sections 446M and 446N).

• (3) The “relevant tax year” is the tax year in which the valuation date falls.

• (4) The taxable amount is—

$IMV-MV$

• (5) IMV is the market value of the employment-related securities on the valuation date.

• (6) MV is the amount that would be the market value of the employment-related securities on the valuation date if any non-commercial increases during the relevant period were disregarded.

• (7) For the purposes of subsections (5) and (6)—

• (a) any restrictions having effect in relation to the employment-related securities on the valuation date, and

• (b) any non-commercial reductions during the relevant period,

are to be disregarded.

Limited exemption of removal benefits and expenses: general

446M

• (1) This section applies where on the valuation date the employment-related securities are relevant restricted securities.

• (2) The amount determined under section 446L(4) is to be multiplied by CP.

• (3) CP is—

$$1-OP$where OP is the amount that would be determined under section 428(5) (amount of charge on chargeable event in relation to restricted securities) on the valuation date if there were on that date a chargeable event (resulting in no tax charge).$

• (4) For the purposes of this section the employment-related securities are relevant restricted securities if they are restricted securities or a restricted interest in securities but are not subject to—

• (a) an election under section 430 (election to ignore outstanding restrictions) in relation to a chargeable event which occurred before the valuation date, or

• (b) an election under section 431(1) (election to treat securities as not subject to restrictions).

• (5) If sections 425 to 430 apply to the employment-related securities in accordance with section 431(2) (election to treat securities as not subject to specified restrictions), the reference in subsection (3) to the amount that would be determined under section 428(5) is to the amount that would be so determined in accordance with section 431(2).

Exemption of contributions to registered pension scheme

446N

• (1) This section applies where the employment-related securities have been restricted securities or a restricted interest in securities at any time during the relevant period.

• (2) DA is to be deducted from the amount determined under section 446L(4) (or, where section 446M applies, the amount determined under sections 446L(4) and 446M).

• (3) DA is the aggregate of the amounts arrived at under subsection (4) in relation to each event occurring during the relevant period that is a chargeable event in relation to the employment-related securities.

• (4) The amount is—

$TA-ARTA$

• (5) TA is the taxable amount actually determined under section 428 in relation to the chargeable event.

• (6) AR TA is the taxable amount which would have been determined under section 428 in relation to the chargeable event if any non-commercial increases during the period—

• (a) beginning at the same time as the relevant period, and

• (b) ending immediately before the chargeable event,

had been disregarded.

• (7) If any of the employment income arising under section 426 by virtue of the chargeable event is foreign securities income within the meaning of section 41C, reduce the taxable amount mentioned in subsection (5) by the amount of the foreign securities income.

• (8) If any of the employment income that would have arisen (if the non-commercial interests mentioned in subsection (6) had been disregarded) under section 426 by virtue of the chargeable event would have been foreign securities income (within that meaning), reduce the taxable amount mentioned in subsection (6) by the amount of the foreign securities income.

Supplementary

Exemption of contributions to registered pension scheme

446O

• (1) This section explains what is meant by “relevant period” and “valuation date” in this Chapter.

• (2) The first relevant period in relation to employment-related securities is the period beginning with the date of the acquisition and ending with the following 5th April.

• (3) After the first relevant period, each period beginning with 6th April and ending with the following 5th April is a relevant period in relation to the employment-related securities.

• (4) But if this Chapter ceases to apply to the employment-related securities during a relevant period, the relevant period ends with the date on which this Chapter ceases to apply to them.

• (5) And if this Chapter ceases to apply to an interest in the employment-related securities during a relevant period, the relevant period ends in relation to that interest with the date on which this Chapter ceases to apply to that interest.

• (6) In a case where subsection (5) applies, this Chapter has effect separately in relation to that interest and the remainder of the employment-related securities.

• (7) In this Chapter “valuation date”, in relation to a relevant period, means the date with which the relevant period ends.

446P

• (1) In this Chapter “interest”, in relation to securities, has the meaning indicated in section 420.

• (2) In this Chapter “market value” has the meaning indicated in section 421(1).

• (3) In this Chapter—

• “the acquisition”,

• “the employee”, and

• “employment-related securities”,

• have the meaning indicated in section 421B(8).

• (4) In this Chapter—

• “restricted interest in securities”, and

• “restricted securities”,

• have the same meaning as in Chapter 2 of this Part (see sections 423 and 424).

• (5) In this Chapter “chargeable event” means an event which is a chargeable event for the purposes of section 426.

• (6) In this Chapter “restriction” has the same meaning as in Chapter 2 of this Part (see section 432(8)).

• (7) In this Chapter—

• “non-commercial increase”, and

• “non-commercial reduction”,

• have the meaning indicated in section 446K(4).

• (8) In this Chapter—

• “relevant period”, and

• “valuation date”,

• have the meaning indicated in section 446O.

Childcare: meaning of “care”, “child” and “parental responsibility”

“Qualifying bonus payments”

Tax relief on acquisition of option

Tax charge on post-acquisition chargeable events

“Service company”

Shares under tax advantaged plan or scheme

Meaning of “trigger date” and “post-employment notice period” in section 402D

Supplementary provisions

Other related provisions

Exclusions: approved plan or scheme securities

Meaning of “consideration”

Appeals

Meaning of “employee-controlled” etc

Relief for secondary Class 1 contributions met by employee

Application of this Chapter

Definitions

Application of this Chapter where securities exchanged for further securities

Application of this Chapter

Pre-6th April 2003 acquisitions

43A

• (1) This paragraph relates to the operation of section 421E (exclusions from Chapters 2 to 4 of Part 7: residence) in relation to an acquisition made before 6th April 2003.

• (2) Section 421E(1) has effect with the substitution of “ the employee was not chargeable under Case I of Schedule E in respect of the employment ” for the words from “the earnings”.

• (3) Section 421E(2) has effect with the substitution of “ the emoluments of the employment did not fall to be charged to income tax under Schedule E ” for the words from “the earnings”.

316A

• (1) This section applies where an employer makes a payment to an employee in respect of reasonable additional household expenses which the employee incurs in carrying out duties of the employment at home under homeworking arrangements.

• (2) No liability to income tax arises in respect of the payment.

• (3) In this section, in relation to an employee—

• “homeworking arrangements” means arrangements between the employee and the employer under which the employee regularly performs some or all of the duties of the employment at home; and

• “household expenses” means expenses connected with the day to day running of the employee’s home.

Chapter 3C — Securities acquired for less than market value

446Q

• (1) This Chapter applies if—

• (a) no payment is made for employment-related securities at or before the time of the acquisition, or

• (b) the payment made for employment-related securities at or before that time is less than their market value.

• (2) For the purposes of subsection (1) any obligation to make a payment or further payment after the time of the acquisition is to be disregarded.

• (3) Where the employment-related securities are, or are an interest in, securities which are not fully paid up, the reference in subsection (1) to the market value of the employment-related securities is to what it would be if the securities were fully paid up.

• (4) If section 425(2) (no charge on acquisition of certain restricted securities or restricted interests in securities) applies in relation to the employment-related securities, this Chapter has effect as if the employment-related securities were not acquired until the occurrence of the first event which is a chargeable event for the purposes of section 426 in relation to the employment-related securities.

• (5) This section is subject to section 446R (case outside this Chapter).

446R

• (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) all the company’s shares of the class are acquired either for no payment or for a payment less than their market value,

• (ba) subsection (1A) is satisfied, and

• (c) subsection (3) or (4) is satisfied.

• (1A) This subsection is satisfied unless something which affects the employment-related securities has been done (at or before the time of the acquisition) 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) Where the company’s shares of the class are not fully paid up, the reference in subsection (1) to their market value is to what it would be if they were fully paid up.

• (3) This subsection is satisfied if, at the time of the acquisition of the employment-related securities, the company is employee-controlled by virtue of holdings of shares of the class.

• (4) This subsection is satisfied if, at that time, the majority of the company’s shares of the class are not employment-related securities.

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

446S

• (1) Where this Chapter applies an interest-free loan (“the notional loan”) is to be treated as having been made to the employee by the employer at the time of the acquisition.

• (2) The provisions listed in subsection (3) apply as though the notional loan were an employment-related loan as defined in section 174 if and for so long as the employment has not terminated.

• (3) The provisions are—

• section 175 (benefit of taxable cheap loan treated as earnings),

• section 178 (exception for loans where interest qualifies for tax relief),

• section 180 (threshold for benefit of loan to be treated as earnings),

• section 182 (normal method of calculation: averaging),

• section 183 (alternative method of calculation),

• section 184 (interest treated as paid),

• section 185 (apportionment of cash equivalent in case of joint loan etc), and

• section 187 (aggregation of loans by close company to director).

• (4) This section is not affected by section 554Z2(2).

446T

• (1) The amount of the notional loan initially outstanding is—

$$MV-DA$where— MV is the market value of the employment-related securities at the time of the acquisition, and DA is the total of any deductible amounts.$

• (2) Where the employment-related securities are, or are an interest in, securities which are not fully paid up, the reference in subsection (1) to the market value of the employment-related securities is to what it would be if the securities were fully paid up.

• (3) For the purposes of subsection (1) each of the following is a “deductible amount”—

• (a) any payment made for the employment-related securities by the employee, and any payment so made by the person by whom they were acquired (if not the employee), at or before the time of the acquisition,

• (b) any amount that constitutes earnings from the employee’s employment under Chapter 1 of Part 3 (earnings) in respect of the acquisition of the employment-related securities (other than an amount of exempt income),

• (ba) any amount treated as earnings from the employee's employment under section 226A (employee shareholder shares: amount treated as earnings) in respect of the acquisition of the employment-related securities (other than an amount of exempt income),

• (c) if section 425(2) (no charge on acquisition of certain restricted securities or restricted interests in securities) applies in relation to the employment-related securities, any amount that counts as employment income of the employee under section 426 by reason of the first event which is a chargeable event for the purposes of that section in relation to the employment-related securities,

• (d) if the employment-related securities were acquired on a conversion of other employment-related securities, any amount that counts as employment income of the employee under section 438 (charge on conversion) by reason of the conversion, ...

• (e) if the acquisition is pursuant to a securities option, any amount that counted as employment income of the employee under section 476 (acquisition of securities pursuant to securities option) in respect of the acquisition , and

• (f) any amount that has counted as employment income of the employee in respect of the employment under Chapter 2 of Part 7A in relation to the employment-related securities.

• (3A) In subsection (3)(b) and (ba) the references to an amount of exempt income, in a case in which the amount that constitutes, or is treated as, earnings in respect of the acquisition is not an amount of general earnings to which any of the charging provisions of Chapters 4 and 5 of Part 2 applies, includes any amount that would be an amount of exempt income if any of those charging provisions were to apply.

• (4) The amount of the notional loan outstanding at any subsequent time is the difference between—

• (a) the amount initially outstanding, and

• (b) the amount of any payments or further payments made for the employment-related securities after the acquisition but before that time.

446U

• (1) The notional loan is treated as discharged when—

• (a) the employment-related securities are disposed of otherwise than to an associated person, ...

• (b) if there is an outstanding or contingent liability to pay for the employment-related securities, that liability is released, extinguished, transferred or adjusted so as no longer to bind any associated person (except in circumstances in which subsection (4)(aa) applies), or

• (c) something which affects the employment-related securities is 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.

• (1A) Subsection (1)(a) does not apply if, at the time of the acquisition, there was an actual or contingent liability to make one or more further payments equal to the amount initially outstanding for the employment-related securities.

• (2) If the notional loan is discharged as the result of an event specified in subsection (1), the amount of the notional loan outstanding immediately before the occurrence of the event counts as employment income of the employee for the relevant tax year (whether or not the employment has terminated before or since the acquisition).

• (3) The “relevant tax year” is the tax year in which the notional loan is treated as discharged.

• (4) The notional loan is also treated as discharged when—

• (a) payments or further payments for the employment-related securities equal to the amount initially outstanding in relation to them have been made by an associated person, ...

• (aa) the employment-related securities, together with the liability to make such further payment or payments, are disposed of otherwise than to an associated person and for consideration of an amount that reflects the transfer of the liability, or

• (b) the employee dies.

446V

This Chapter does not affect any liability to income tax arising in respect of the acquisition under—

• (a) Chapter 1 of Part 3 (earnings),

• (b) Chapter 10 of Part 3 (taxable benefits: residual liability to charge),

• (ba) section 226A (employee shareholder shares: amount treated as earnings),

• (c) Chapter 3 of this Part (acquisition by conversion),

• (d) Chapter 3A of this Part (securities with artificially depressed market value), ...

• (e) Chapter 5 of this Part (acquisition of securities pursuant to securities option) , or

• (f) Chapter 2 of Part 7A (employment income provided through third parties)

446W

• (1) In this Chapter—

• “interest”, in relation to securities,

• “securities”,

• “securities option”, and

• “shares”,

• have the meaning indicated in section 420.

• (2) In this Chapter “market value” has the meaning indicated in section 421(1).

• (3) In this Chapter “the acquisition” has the meaning indicated in section 421B(8) (but subject to section 446Q(4)).

• (4) In this Chapter—

• “the employment”,

• “the employee” (except in section 446R),

• “the employer”, and

• “employment-related securities”,

• have the meaning indicated in section 421B(8).

• (5) In this Chapter “associated person” has the meaning indicated in section 421C.

• (6) In this Chapter—

• “associated company”, and

• “employee-controlled”,

• have the meaning indicated in section 421H.

• (7) In this Chapter “the notional loan” has the meaning indicated in section 446S(1).

Chapter 3D — Securities disposed of for more than market value

Deductions from earnings not to exceed earnings

446X

This Chapter applies if—

• (a) employment-related securities are disposed of by an associated person so that no associated person is any longer beneficially entitled to them, and

• (b) the disposal is for a consideration which exceeds the market value of the employment-related securities at the time of the disposal.

446Y

• (1) Where this Chapter applies the amount determined under subsection (3) counts as employment income of the employee for the relevant tax year.

• (2) The “relevant tax year” is the tax year in which the disposal occurs.

• (3) The amount is—

$$CD-MV-DA$where— CD is the amount of the consideration given on the disposal, MV is the market value of the employment-related securities at the time of the disposal, and DA is the amount of any expenses incurred in connection with the disposal.$

Travel costs and expenses where duties performed abroad: visiting spouse’s , civil partner's or child’s travel

446Z

• (1) In this Chapter “market value” has the meaning indicated in section 421(1).

• (2) For the purposes of this Chapter sections 421(2) and 421A apply for determining the amount of the consideration given for anything.

• (3) In this Chapter—

• “the employee”, 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.

How the £30,000 threshold applies

Charge on benefit to which this Chapter applies

“Post-employment notice pay”

Other related provisions

Meaning of “market value” etc

Penalty if information not given correctly

Relief for secondary Class 1 contributions met by employee

“Restricted securities” and “restricted interest in securities”

Relief for secondary Class 1 contributions met by employee

Relief for secondary Class 1 contributions met by employee

Charge on restricted securities

Election for outstanding restrictions to be ignored

Restricted securities and convertible securities

Election for full or partial disapplication of this Chapter

Election for full or partial disapplication of this Chapter

Shares under tax advantaged plan or scheme

Definitions

Definitions

Participation in more than one connected SIP in a tax year

18A

• (1) The plan must provide that, if an individual participates in an award of shares under the plan in a tax year in which he has already participated in an award of shares under one or more other Schedule 2 SIPs established by the company or a connected company—

• (a) paragraph 35 (maximum annual award of free shares),

• (b) paragraph 46 (maximum amount of partnership share money deductions), and (c)paragraph 64 (limit on amount reinvested), apply as if the plan and the other plan or plans were a single plan.

• (2) In this paragraph “connected company” has the same meaning as in paragraph 18.

Duty to monitor participants in connected schemes

71A

The trust instrument must require the trustees to maintain records of participants who have participated in one or more other Schedule 2 SIPs established by the company or a connected company.

Retirement age

35A

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Securities disposed of for more than market value

61A

Chapter 3D of Part 7 does not apply in relation to securities, or an interest in securities, acquired on or before 6th April 1976.

Tax exemption on acquisition

Tax charge on post-acquisition chargeable events

Cash equivalent of the benefit of a van

Reduction of cash equivalent where car is shared

Section 312B: the participation and equality requirements

Tax relief on acquisition

Tax charge on post-acquisition chargeable events

Minor definitions: general

Supplementary

Removal benefits and expenses to which section 271 applies

Extra amounts to be added in connection with a car

European travel expenses of MPs and other representatives

“Qualifying bonus payments”

Exemption of contributions to overseas pension scheme

Section 312B: the participation and equality requirements

Childcare: meaning of “qualifying child care”

Temporary non-residents

Application of this Chapter

Exclusions: residence etc

Exclusions: residence etc

Penalty if information not given correctly

Relief for secondary Class 1 contributions met by employee

Charge on occurrence of chargeable event

Amount of consideration given for entitlement to convert

Application of this Chapter

Amount of consideration given for entitlement to convert

Application of this Chapter

Amount of charge

Amount of charge

Charge on acquisition

Amount of charge

Adjustment of market value: conditional interests

Adjustment of market value: consideration for entitlement to convert

Disapplication of exceptions from charges

Disapplication of exceptions from charges

Childcare: meaning of “care”, “child” and “parental responsibility”

Scope of this Chapter: cost of benefits deductible as if paid by employee

446IA

• (1) Section 429 (exception from charge under section 426 for certain company shares) does not prevent section 426 (restricted securities: chargeable events) applying in relation to an event if section 446E or 446I(1)(a) would have effect in relation to the event.

• (2) Section 443 (exception from charge under section 438 for certain company shares) does not prevent section 438 (convertible securities: chargeable events) applying in relation to an event if section 446G, 446H or 446I(1)(b) would have effect in relation to the event.

• (3) Section 446R (exception from charge under Chapter 3C for certain company shares) does not prevent that Chapter (securities acquired for less than market value) applying in relation to employment-related securities if section 446B would have effect in relation to them.

• (4) Section 449 (exception from charge under Chapter 4 for certain company shares) does not prevent that Chapter (benefits from securities) applying in relation to a benefit if section 446I(1)(e) would have effect in relation to the benefit.

Meaning of “trigger date” and “post-employment notice period” in section 402D

446NA

• (1) None of the provisions specified in subsection (2) (exceptions from charges for certain company shares) apply in relation to employment-related securities if the market value of the employment-related securities at the time of the acquisition has been increased by at least 10% by non-commercial increases within the period of 7 years ending with the acquisition.

• (2) The provisions are—

• (a) section 429 (restricted securities),

• (b) section 443 (convertible securities),

• (c) section 446R (securities acquired for less than market value), and

• (d) section 449 (post-acquisition benefits from securities).

• (3) If section 446L (market value on valuation date increased by more than 10% by non-commercial increases during relevant period) applies in relation to employment-related securities, section 429 does not subsequently apply in relation to the employment-related securities.

Securities acquired for purpose of avoidance

Application of this Chapter

Election for full or partial disapplication of this Chapter

Application of this Chapter

Definitions

Application of this Chapter

Adjustment of market value: charge on conversion

Adjustment of market value: conditional interests

Amount of gain realised on occurrence of chargeable event

“Relevant period” and “valuation date”

431A

• (1) Where employment-related securities are restricted securities or a restricted interest in securities, the employer and the employee are to be treated as making an election under section 431(1) in relation to the employment-related securities if they are shares, or an interest in shares, to which this subsection applies.

• (2) Subsection (1) applies to—

• (a) shares awarded or acquired under a Schedule 2 share incentive plan (within the meaning of Chapter 6 of this Part) in circumstances in which (in accordance with section 490) no liability to income tax arises,

• (b) shares acquired by the exercise of a share option granted under a Schedule 3 SAYE option scheme (within the meaning of Chapter 7 of this Part) in circumstances in which (in accordance with section 519) no liability to income tax arises,

• (c) shares acquired by the exercise of a share option granted under a Schedule 4 CSOP scheme (within the meaning of Chapter 8 of this Part) in circumstances in which (in accordance with section 524) no liability to income tax arises, and

• (d) shares acquired by the exercise of a qualifying option within the meaning of section 527(4) (enterprise management incentives) in circumstances in which (in accordance with section 530) no liability to income tax arises.

Loans to which this Chapter applies

How the £30,000 threshold applies

Amounts charged to be treated as highest part of total income

Exclusions: approved plan or scheme securities

Reportable events

Election for outstanding restrictions to be ignored

Relief for secondary Class 1 contributions met by employee

Shares under tax advantaged plan or scheme

Disapplication of exceptions from charges

Adjustment of market value: conditional interests

Relief for secondary Class 1 contributions met by employee

Application of this Chapter

Restricted securities and convertible securities

Amount of charge

Securities subject to restriction on valuation date

Adjustment of market value: charge on conversion

Adjustment of market value: conditional interests

Adjustment of market value: consideration for entitlement to convert

Definitions

Taxable amount under Chapter 4

UK-based earnings for year when employee not resident in UK

Vans: reductions of cash equivalent

Meaning of “general earnings from overseas Crown employment subject to UK tax”

Reduction for payments for private use

Section 41A: the relevant period

Modification of provisions where van temporarily replaced

Arrangements with agencies

169A

• (1) This section applies where—

• (a) an employee (“E”) and a member of the employee’s family or household (“M”) are employed by the same employer, and

• (b) as a result of a van being made available to M in a tax year, E would (apart from this section) be chargeable to tax in respect of the van in that year by virtue of section 154.

• (2) The cash equivalent of the benefit of the van and of any fuel provided for the van by reason of E’s employment is not to be treated as E’s earnings for that year if—

• (a) M is chargeable to tax in respect of the van in that year by virtue of section 154, or

• (b) M's employment is lower-paid employment as a minister of religion.

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chevening House

Benefit of living accommodation treated as earnings

Cash equivalent: cost of accommodation not over £75,000

Cash equivalent: accommodation provided for more than one employee

248A

• (1) This section applies where—

• (a) an emergency vehicle is made available to a person employed in an emergency service mainly for use for the person's business travel ,

• (b) the terms on which it is made available prohibit its private use otherwise than when the person is on call or ... commuting, and

• (c) the person does not make private use of it otherwise than in such circumstances.

• (2) No liability to income tax arises by virtue of Chapter 6 or 10 of Part 3 (taxable benefits: cars, vans etc. and residual liability to charge) in respect of the benefit.

• (3) “Emergency vehicle” means a vehicle which is used to respond to emergencies and which either—

• (a) has fixed to it a lamp designed to emit a flashing light for use in emergencies, or

• (b) would have such a lamp fixed to it but for the fact that (if it did) a special threat to the personal physical security of those using it would arise by reason of it being apparent that they were employed in an emergency service.

• (4) The following are “employed in an emergency service”—

• (a) constables and other persons employed for police purposes,

• (b) persons employed for the purposes of a fire, or fire and rescue, service, and

• (c) persons employed in the provision of ambulance or paramedic services.

• (5) The Treasury may by order amend subsection (4).

• (6) “Private use”, in relation to a person, means any use other than for the person’s business travel; and “business travel” has the same meaning as in Chapter 6 of Part 3 (see section 171(1)).

• (7) A person to whom an emergency vehicle is made available is on call when liable, as part of normal duties, to be called on to use the emergency vehicle to respond to emergencies.

• (8) A person to whom an emergency vehicle is made available is ... commuting when the person—

• (a) is using the vehicle for ordinary commuting or for travel between two places that is for practical purposes substantially ordinary commuting, and

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

270A

• (1) If qualifying childcare vouchers are provided for an eligible employee—

• (a) no liability to income tax arises by virtue of section 62 (general definition of earnings), and

• (b) liability to income tax by virtue of Chapter 4 of Part 3 (taxable benefits: vouchers and credit tokens) arises only in respect of so much of the cash equivalent of the benefit as exceeds the exempt amount.

For the meaning of “eligible employee”, see section 270AA.

• (2) A “qualifying childcare voucher” means a non-cash voucher in relation to which Conditions A to D are met.

• (3) Condition A is that the voucher is provided to enable an employee to obtain care for a child who—

• (a) is a child or stepchild of the employee and is maintained (wholly or partly) at the employee’s expense, or

• (b) is resident with the employee and is a person in respect of whom the employee has parental responsibility.

• (4) Condition B is that the voucher can only be used to obtain qualifying child care.