http://www.legislation.gov.uk/ukpga/2003/1/section/446UIncome Tax (Earnings and Pensions) Act 2003An Act to restate, with minor changes, certain enactments relating to income tax on employment income, pension income and social security income; and for connected purposes.texttext/xmlenStatute Law Database2026-07-29Expert Participation2026-07-15 Income Tax (Earnings and Pensions) Act 2003s. 452(2)(aa)Finance Act 2013Sch. 23 para. 11Sch. 23 para. 38art. 2Income Tax (Earnings and Pensions) Act 2003s. 114(1)(a)(i)(ii)Finance Act 2026s. 17(2)(b)(5)s. 17(6)-(9)Income Tax (Earnings and Pensions) Act 2003s. 116(1)(a)(b)Finance Act 2026s. 17(3)(b)(5)s. 17(6)-(9)Income Tax (Earnings and Pensions) Act 2003s. 116AFinance Act 2026s. 17(4)(5)s. 17(6)-(9)Income Tax (Earnings and Pensions) Act 2003s. 221AFinance Act 2026s. 22(1)s. 22(2) Part 7Chapter 3C446U1The notional loan is treated as discharged when—athe employment-related securities are disposed of otherwise than to an associated person, ...bif there is an outstanding or contingent liability to pay for the employment-related securities, that liability is released, extinguished, transferred or adjusted so as no longer to bind any associated person (except in circumstances in which subsection (4)(aa) applies), orcsomething which affects the employment-related securities is 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.1ASubsection (1)(a) does not apply if, at the time of the acquisition, there was an actual or contingent liability to make one or more further payments equal to the amount initially outstanding for the employment-related securities.2If the notional loan is discharged as the result of an event specified in subsection (1), the amount of the notional loan outstanding immediately before the occurrence of the event counts as employment income of the employee for the relevant tax year (whether or not the employment has terminated before or since the acquisition).3The “relevant tax year” is the tax year in which the notional loan is treated as discharged.4The notional loan is also treated as discharged when—apayments or further payments for the employment-related securities equal to the amount initially outstanding in relation to them have been made by an associated person, ...aathe employment-related securities, together with the liability to make such further payment or payments, are disposed of otherwise than to an associated person and for consideration of an amount that reflects the transfer of the liability, orbthe employee dies.Pt. 7: power to modify conferred (7.4.2005) by Finance Act 2005 (c. 7), s. 21(8)-(10)Pt. 7 Ch. 3C inserted (with effect in accordance with Sch. 22 para. 7(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 7(1)S. 446U(1A) inserted (17.7.2014) by Finance Act 2014 (c. 26), Sch. 9 para. 37(3)S. 446U(4)(aa) inserted (17.7.2014) by Finance Act 2014 (c. 26), Sch. 9 para. 37(4)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)S. 446U(1)(b) substituted (17.7.2014) by Finance Act 2014 (c. 26), Sch. 9 para. 37(2)S. 446U(1)(c) and word inserted (with effect in accordance with Sch. 2 para. 14(2) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 14