Income Tax (Earnings and Pensions) Act 2003

461 Related acquisitions of additional shares

(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).