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Income Tax (Earnings and Pensions) Act 2003

Section 423: Interests in shares acquired “as a director or employee”

1837.Subsection (1) explains the circumstances in which shares are regarded as being acquired by a person (“E”) “as a director or employee”. They are broadly equivalent to the circumstances in which a normal earnings charge would arise. The provision derives from section 140H(1) of ICTA. Subsection (1)(c) no longer says an assignment “to him” because if the assignment was to anyone else the shares would not have been acquired by E.

1838.Subsection (2) qualifies subsection (1) and derives from section 140H(2) of ICTA with only minor modifications.

1839.Subsections (3) and (4) are based on section 140H(4) of ICTA and explain the treatment when one conditional or convertible interest is exchanged for another.

1840.Subsection (5) derives from the opening words of section 140H(4) of ICTA.

1841.Subsection (6) contains the definition of “convertible shares”.

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