Income Tax (Earnings and Pensions) Act 2003

227 Scope of Part 4

(1) This Part contains—

(a) earnings-only exemptions, and

(b) employment income exemptions.

(2) In this Act “earnings-only exemption” means an exemption from income tax which—

(a) prevents liability to tax arising in respect of earnings, either by virtue of one or more particular provisions (such as a Chapter of the benefits code) or at all, and

(b) does not prevent liability to tax arising in respect of other employment income.

(3) In this Act “employment income exemption” means an exemption from income tax which prevents liability to tax arising in respect of employment income of any kind at all.

(4) The following provisions in Part 7 also confer exemption from liability to income tax in respect of earnings—

(a) section 426 (conditional interests in shares: no charge in respect of acquisition of employee’s interest in certain circumstances),

(b) section 474 (share options: no charge in respect of receipt of shorter- term option),

(c) sections 489 to 493 and sections 496 to 499 (approved share incentive plans),

(d) section 518 (approved SAYE option schemes: no charge in respect of receipt of option),

(e) section 519 (approved SAYE option schemes: no charge in respect of exercise of option),

(f) section 523 (approved CSOP schemes: no charge in respect of receipt of option),

(g) section 524 (approved CSOP schemes: no charge in respect of exercise of option),

(h) section 528 (enterprise management incentives: no charge on receipt of qualifying option),

(i) section 542 (priority share allocations: exemption where offer made to public and employees), and

(j) section 544 (priority share allocations: exemption where different offers made to public and employees).