The Income Tax (Employments) (Notional Payments) (Amendment) Regulations 1998

Specification of market for the purposes of section 203F(2)(b)3A

The New York Stock Exchange is a market which is specified for the purposes of section 203F(2)(b) (readily convertible assets).

Exclusion of matters from section 203FA3B

1

The matter described in paragraph (2) below is a matter of a description excluded from the scope of what constitutes enhancing the value of an asset for the purposes of section 203FA.

2

The matter described is the enhancement of value arising on the acquisition by the employee (whether or not as a result of the exercise of a right to acquire shares) of—

a

any shares under a scheme approved by the Board under Schedule 9 to the Taxes Act,

b

any right over or interest in shares obtained or acquired by the employee under such a scheme, and

c

any shares acquired by the employee as a result of the exercise of a right over shares obtained before 27th November 1996 otherwise than under a scheme approved by the Board under Schedule 9 to the Taxes Act,

where the shares in question form part of the ordinary share capital of—

i

an employer which is a company (“the employer company”),

ii

a company which has control of the employer company, or

iii

a company which either is, or has control of, a company which is a member of a consortium owning either the employer company or a company having control of the employer company.

3

Sub-paragraphs (a) to (e) of paragraph (3) of regulation 3 shall apply for the interpretation of paragraph (2) above as they apply for the purposes of paragraph (2) of that regulation.

Certain notional payments made between 6th April 1998 and 31st July 1998—accounting for income tax8A

1

This regulation applies to any notional payment falling within section 203B (payment by intermediary), section 203C (employee of non-UK employer), section 203F (readily convertible assets), section 203FA (enhancing the value of an asset), section 203FB (gains from share options), section 203G (vouchers and credit-tokens), section 203H (credit-tokens) or section 203I (cash vouchers), where the notional payment—

a

is made in the period beginning on 6th April 1998 and ending on 31st July 1998, and

b

is a notional payment in respect of which the employer would, but for section 65(7), 66(3), 67(3), 68(5) or 69(6) of the Finance Act 1998, have been liable to deduct an amount of income tax in accordance with regulation 7, or to account for an amount of income tax in accordance with regulation 8.

2

The employer shall be liable to account to the Board, not later than the date specified in paragraph (3) below, for an amount of income tax in respect of the notional payments referred to in paragraph (1) above equal to the amount which he would have been liable to deduct in accordance with regulation 7 or for which he would have been liable to account in accordance with regulation 8.

3

The date specified is the 19th August 1998.

12A

In Chapter IV of the principal Regulations6 after regulation 80 there shall be inserted—

Payment for assignment or release of a right to acquire shares80ZA

1

This regulation applies where—

a

the consideration for the assignment or release of a right to acquire shares takes the form of a payment,

b

the payment is made in the period beginning on 6th April 1998 and ending on 31st July 1998,

c

so much of that payment (“the relevant amount”) as does not exceed the amount assessable by virtue of section 135 of the Taxes Act is treated, in accordance with section 203FB(3)(a) of that Act, as a payment of assessable income of the relevant person, and

d

the employer would, but for section 67(3) of the Finance Act 1998, have accordingly been liable to deduct an amount of income tax in accordance with these Regulations in respect of the relevant amount.

2

Regulation 40 shall have effect as if the relevant amount was an amount of emoluments paid by the employer in the income tax month ending on 5th August 1998.