Explanatory Notes

Income Tax (Earnings and Pensions) Act 2003

2003 CHAPTER 1

6th March 2003

Commentary on Sections

Example 3

£150(Pe) – £50(E) = £100
Chapter 9: Taxable benefits: disposals of shares for more than market value
Overview
Section 198: Shares to which this Chapter applies

782.This section sets out the subject of the legislation. It derives from parts of sections 162(1), (6) and (9) and 168(3) of ICTA.

783.Subsection (1) describes the circumstances which bring shares within the provisions of this Chapter.

784.Subsection (2) labels the shares “employment-related shares”.

785.Subsection (3) makes it clear that the employment-related shares can be in a company other than the employer. It derives from section 162(1)(a).

786.Subsection (4) applies to determine, in a similar way to the “provision” of other benefits, whether the right or opportunity to acquire shares made available by the employer is “by reason of the employment”. This change in approach is explained more fully in Note 21 in Annex 2. It derives from section 168(3)(b).