Part 7

Employment income: income and exemptions relating to securities
Chapter 4

Post-acquisition benefits from securities

Charge on other chargeable benefits from securities
447
1
This Chapter applies if an associated person receives a benefit
in connection with employment-related securities
.
2
The taxable amount determined under section 448 counts as employment income of the employee for the relevant tax year.
3
The “
relevant tax year
” is the tax year in which the benefit is received.
4
If the benefit is otherwise chargeable to income tax this section does not apply unless something has been done which affects the employment-related securities as part of a scheme or arrangement the main purpose (or one of the main purposes) of which is the avoidance of tax or national insurance contributions.
5
This section is subject to section 449 (case outside this Chapter).

Amount of charge
448
The taxable amount for the purposes of section 447 (charge on other chargeable benefits) is the amount or market value of the benefit.

Case outside this Chapter
449
1
This Chapter does not apply if—
a
the employment-related securities are shares (or an interest in shares) in a company of a class,
b
a similar benefit is received by the owners of all the company’s shares of the class,
ba
subsection (1A) is satisfied,
and
c
subsection (2) or (3) is satisfied.
1A
This subsection is satisfied unless something which affects the employment-related securities has been done as part of a scheme or arrangement the main purpose (or one of the main purposes) of which is the avoidance of tax or national insurance contributions.
2
This subsection is satisfied if, immediately before the receipt of the benefit, the company is employee-controlled by virtue of holdings of shares of the class.
3
This subsection is satisfied if, immediately before the receipt of the benefit, the majority of the company’s shares of the class are not
employment-related securities.
4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Definitions
450
1
In this Chapter—
- “
interest
”, in relation to shares, and
- “shares”,
- have the meaning indicated in section 420(8).
2
In this Chapter “
market value
” has the meaning indicated in section 421(1).
3
In this Chapter—
- “
the employee
”
(except in section 449), and
- “employment-related securities”,
- have the meaning indicated in section 421B(8).
4
In this Chapter “
associated person
” has the meaning indicated in section 421C.
5
In this Chapter—
- “
associated company
”, and
- “employee-controlled”,
- have the meaning indicated in section 421H.

Tax charge where restrictions or rights varied

Amount of charge
451. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cases outside charge under section 449
452. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tax charge on increase in value of shares of dependent subsidiaries

Charge on increase in value of shares of dependent subsidiary
453. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chargeable increases
454. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Amount of charge
455. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cases outside charge under section 453
456. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tax charge on other benefits from shares

Charge on other chargeable benefits from shares
457. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chargeable benefits
458. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Amount of charge
459. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cases outside charge under section 457
460. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supplementary provisions

Related acquisitions of additional shares
461. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Company reorganisations etc.
462. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Disposals of shares to connected persons etc. ignored
463. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Application to interests in shares
464. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Duty to notify acquisitions of shares or interests in shares
465. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Duty to notify chargeable events and chargeable benefits
466. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interpretation

Meaning of “dependent subsidiary”
467. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Meaning of “employee-controlled”
468. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Shares “held by outside shareholders”
469. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Minor definitions
470. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pt. 7: power to modify conferred (7.4.2005) by Finance Act 2005 (c. 7), s. 21(8)-(10)
Words in s. 447(1) substituted (with effect in accordance with Sch. 2 para. 18(4) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 18(2)
Pt. 7 Ch. 4 (ss. 447-450) substituted for Pt. 7 Ch. 4 (ss. 447-470) (16.4.2003 with effect in accordance with Sch. 22 para. 9(2)-(4) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 9(1)
S. 449(1A) substituted (with effect in accordance with Sch. 2 para. 19(2) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 19
S. 447(4) substituted (with effect in accordance with Sch. 2 para. 18(4) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 18(3)
S. 449(4) repealed (with effect in accordance with s. 86(8) of the amending Act) by Finance Act 2004 (c. 12), Sch. 42 Pt. 2(11)
Pt. 7 heading substituted (with effect in accordance with Sch. 22 para. 2(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 2(1)
Words in s. 449(3) substituted (retrospective to 7.5.2004) by Finance Act 2004 (c. 12), ss. 86(2)(d)(5)(8), 86(1)
S. 449(1)(ba) inserted (retrospective to 7.5.2004) by Finance Act 2004 (c. 12), ss. 86(2)(d)(3)(8), 86(1)
S. 452(2)(c)(d) applied (with effect in accordance with s. 21(1) of the amending Act) by Finance Act 2005 (c. 7), s. 21(2)
S. 452(2)(c)(d) applied (with effect in accordance with s. 21(1) of the amending Act) by Finance Act 2005 (c. 7), s. 21(2)
S. 452(2)(a) applied (with effect in accordance with s. 21(1) of the amending Act) by Finance Act 2005 (c. 7), s. 21(2)
S. 452(1) applied (with effect in accordance with s. 21(1) of the amending Act) by Finance Act 2005 (c. 7), s. 21(2)