Income Tax (Earnings and Pensions) Act 2003 (c. 1)

Part 7 Employment income: share-related income and exemptions

Chapter 2 Conditional interests in shares

Tax exemption

426 No charge in respect of acquisition of employee’s interest in certain circumstances

(1) Subsection (2) applies if the terms on which the employee acquires the employee’s interest are such that the interest will cease to be only conditional within 5 years after its acquisition.

(2) No liability to income tax arises in respect of the acquisition of the employee’s interest, except as provided by—

(a) Chapter 8 of Part 3 (taxable benefits: notional loans in respect of acquisitions of shares), or

(b) section 476 (charge on exercise of share option by employee).