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Income Tax (Earnings and Pensions) Act 2003

Section 494: No charge on removal of restrictions applying to shares

2029.This section is the first of three that deal with the tax advantages connected with the holding of shares. Subsections (1) and (2) apply where a participant’s plan shares are subject to provision for forfeiture, and that provision is varied or removed. In these circumstances a participant is not liable to income tax by virtue of sections 427 or 449. Those sections may be found, respectively, in Chapters 2 and 4 of this Part. Subsection (3) provides that a participant is not liable to income tax by virtue of section 449 when the holding period comes to an end. The expressions “provision for forfeiture” and “holding period” are defined in Schedule 2, in paragraphs 99(1) and 36 respectively.

2030.This section derives from paragraph 80(1) and (2) of Schedule 8 to FA 2000. There is a new subsection (1), setting out the circumstances in which subsection (2) applies.

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