Corporation Tax Act 2009

1011 Calculation of relief if shares are restricted or convertible

(1) If the shares acquired are restricted shares or convertible shares (or both), the amount of relief to be given is calculated as follows.

This is subject to section 1012.

(2) If the shares are restricted shares, the amount of relief is equal to the amount that, as a result of the acquisition of the shares, is earnings of the employee within Chapter 1 of Part 3 of ITEPA 2003 from the relevant employment.

(3) If the shares are convertible shares, the amount of relief is equal to the amount that, as a result of the acquisition of the shares, is earnings of the employee within Chapter 1 of Part 3 of ITEPA 2003 from the relevant employment.

In calculating the employee’s earnings for this purpose the market value of the shares is to be determined as if they were not convertible shares.

(4) For the purposes of subsections (2) and (3) “earnings” does not include any amount of exempt income (within the meaning of section 8 of ITEPA 2003).

(5) If the shares are both restricted and convertible, the total amount of relief is whichever is the greater of the amounts of relief given by subsections (2) and (3) (or, if the amount is the same in each case, that amount).