Part 7Employment income: income and exemptions relating to securities

F1Chapter 3BSecurities with artificially enhanced market value

Charge on non-commercial increases

446LCharge on non-commercial increases

(1)

This section applies in relation to employment-related securities where on a date that is the valuation date in relation to a relevant period IMV is at least 10% greater than MV.

(2)

The taxable amount determined under subsection (4) counts as employment income of the employee for the relevant tax year (but subject to sections 446M and 446N).

(3)

The “relevant tax year” is the tax year in which the valuation date falls.

(4)

The taxable amount is—

IMV-MV

(5)

IMV is the market value of the employment-related securities on the valuation date.

(6)

MV is the amount that would be the market value of the employment-related securities on the valuation date if any non-commercial increases during the relevant period were disregarded.

(7)

For the purposes of subsections (5) and (6)—

(a)

any restrictions having effect in relation to the employment-related securities on the valuation date, and

(b)

any non-commercial reductions during the relevant period,

are to be disregarded.