Income Tax (Earnings and Pensions) Act 2003

Supplementary provisions E+W+S+N.I.

461 Related acquisitions of additional shares E+W+S+N.I.

(1) This section applies if, by virtue of holding the shares (“the original shares”) or the interest in them, the employee acquires—

(a) additional shares (“the additional shares”), or

(b) an interest in additional shares,

whether for consideration or not.

(2) The additional shares are, or the interest in them is, to be treated—

(a) for the purposes of this Chapter, as acquired by the employee as a director or employee of the employer company, and

(b) for the purposes only of sections 449 to 456 (charge on occurrence of chargeable event or increase in value of shares of dependent subsidiaries), as so acquired at the same time as the original shares or the interest in them.

(3) For the purposes of sections 453 to 456 (charge on increase in value of shares of dependent subsidiaries)—

(a) the additional shares and the original shares are to be treated as one holding of shares,

(b) the value of the shares comprised in that holding at any time, and of interests in them, is to be determined accordingly (the value of the original shares at the time of the acquisition being attributed proportionately to all the shares in the holding), and

(c) any consideration given for the acquisition of the additional shares, or the interest in them, is to be treated as an increase in the consideration for the original acquisition for the purposes of section 455(2)(a) (amounts that may be deducted in calculating the amount of the tax charge).

462 Company reorganisations etc. E+W+S+N.I.

(1) This section applies if—

(a) on a person ceasing to have a beneficial interest in shares, that person acquires other shares or an interest in other shares, and

(b) the circumstances are such that the shares in which the person ceases to have a beneficial interest constitute “original shares” and the other shares constitute a “new holding” for the purposes of sections 127 to 130 of TCGA 1992 (reorganisations).

(2) Section 127 of TCGA 1992 (under which disposals on reorganisations are disregarded and new holdings are treated as acquired as the original shares were) applies for the purposes of this Chapter.

(3) Any consideration which—

(a) the person gives or becomes liable to give for the new holding, and

(b) is not excluded by virtue of section 128(2) of TCGA 1992 from being consideration for the purposes of section 128(1) of that Act,

is to be treated for the purposes of this Chapter as an increase in the consideration for the original acquisition for the purposes of section 455(2)(a) above (amounts that may be deducted in calculating the amount of the tax charge).

(4) If any consideration of the kind mentioned in section 128(3) of TCGA 1992 is received for the disposal of the original shares—

(a) it is to be apportioned among the shares comprising the new holding, and

(b) the amount which, apart from this subsection, would at a subsequent time be the value of any of those shares is to be treated as being increased by the amount of the consideration apportioned to them.

463 Disposals of shares to connected persons etc. ignored E+W+S+N.I.

(1) The employee is to be treated as continuing to have a beneficial interest in the shares for the purposes of this Chapter until there is a qualifying disposal of the shares or (as the case may be) of the interest in them.

(2) A disposal is a “qualifying disposal” if—

(a) it is a disposal by a bargain at arm’s length with a person who is not connected with the person making the disposal (whether that is the employee or some other person), or

(b) it is a disposal, in accordance with the terms on which the acquisition was made, to the company whose shares they are.

464 Application to interests in shares E+W+S+N.I.

Where this Chapter applies to an interest in shares, an increase or reduction of the interest is to be treated as the acquisition or disposal of a separate interest proportionate to the increase or reduction.

465 Duty to notify acquisitions of shares or interests in shares E+W+S+N.I.

(1) This section applies where a person acquires shares or an interest in shares as mentioned in section 447(1).

(2) The cases where it applies accordingly include the case where an employee is treated as acquiring shares, or an interest in them, by virtue of section 461 or 462.

(3) Each of the following—

(a) the employer company, and

(b) if different, the company whose shares they are,

must provide the Inland Revenue with particulars in writing of the acquisition.

(4) The particulars must be provided before 7th July in the tax year following that in which the acquisition is made.

(5) However, no particulars of any acquisition need be provided by a company under this section if the company has already given particulars of it under—

• section 432 (conditional interest in shares), or

• section 486 (shares allotted or transferred on exercise of share option).

466 Duty to notify chargeable events and chargeable benefits E+W+S+N.I.

(1) This section applies where—

(a) a chargeable event (within the meaning given by section 450) occurs in relation to shares in a company, or

(b) a person receives a chargeable benefit (within the meaning given by section 458) in respect of shares, or an interest in shares, in a company.

(2) Each of the following—

(a) the employer company, and

(b) if different, the company whose shares they are,

must provide the Inland Revenue with particulars in writing of the chargeable event or chargeable benefit and of the shares concerned.

(3) The particulars must be provided within 92 days after the date on which the event occurs or the benefit is received.