Corporation Tax Act 2009

1019 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 1020.

(2) If the shares are restricted shares, the amount of relief is equal to—

(a) the amount that counts as employment income of the employee under section 476 of ITEPA 2003 in relation to the acquisition of the shares, or

(b) if the option is a qualifying option (within the meaning of the EMI code), the amount that would have so counted apart from the EMI code.

(3) If the shares are convertible shares, the amount of relief is equal to—

(a) the amount that counts as employment income of the employee under section 476 of ITEPA 2003 in relation to the acquisition of the shares, or

(b) if the option is a qualifying option (within the meaning of the EMI code), the amount that would have so counted apart from the EMI code;

and in calculating the employee’s employment income 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)—

(a) no account is to be taken of any relief under section 481 or 482 of ITEPA 2003, and

(b) “the EMI code” has the meaning given by section 527(3) of that Act.

(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).

(6) If the employee is dead when the shares are acquired, the amount of relief is to be calculated as if the employee were alive.