Part 7

Employment income: income and exemptions relating to securities
Chapter 5

Securities options

Tax charge on post-acquisition chargeable events

Chargeable events
477
1
This section applies for the purposes of section 476 (charge on occurrence of chargeable event).
2
Any of the events mentioned in subsection (3) is a “
chargeable event
” in relation to the employment-related securities option unless it occurs on or after the death of the employee.
3
The events are—
a
the acquisition of securities pursuant to the employment-related securities option by an associated person,
b
the assignment for consideration of the employment-related securities option by an associated person otherwise than to another associated person or the release for consideration of the employment-related securities option by an associated person, or
c
the receipt by an associated person of a benefit
in connection with the employment-related securities option (other than one within paragraph (a) or (b)).
4
For the purposes of subsection (3)(a) securities are acquired at the time when a beneficial interest is acquired (and not, if different, the time when the securities are conveyed or transferred).
5
A benefit received on account of any disability (within the meaning of
the Equality Act 2010 in England and Wales and Scotland, or
the Disability Discrimination Act 1995) of the employee is to be disregarded for the purposes of subsection (3)(c).
6
A benefit in money or money’s worth received in consideration for or otherwise in connection with—
a
failing or undertaking not to acquire securities pursuant to the employment-related securities option, or
b
granting or undertaking to grant to another person a right to acquire securities which are subject to the employment-related securities option or any interest in them,
is to be regarded for the purposes of subsection (3)(c) as received in connection with the employment-related securities option.
7
For the purposes of section 476(5)
(charge to income tax)
the relevant person in relation to a chargeable event is—
a
in the case of an event that is a chargeable event by virtue of subsection (3)(a), the person by whom the securities are acquired, and
b
in the case of an event that is a chargeable event by virtue of subsection (3)(b) or (c), the person by whom the consideration or benefit is received.
Pt. 7: power to modify conferred (7.4.2005) by Finance Act 2005 (c. 7), s. 21(8)-(10)
Words in s. 477(5) inserted by Equality Act 2010 (c. 15), Sch. 26 para. 52 (as inserted (1.10.2010) by S.I. 2010/2279, art. 1(2), Sch. 1 para. 5) (with S.I. 2010/2317, art. 2)
Words in s. 477(7) substituted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 599 (with Sch. 2)
Pt. 7 Ch. 5 substituted (16.4.2003 for specified purposes and otherwise 1.9.2003 with effect in accordance with Sch. 22 para. 10(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 10(1); S.I. 2003/1997, art. 2
Words in s. 477(3)(c) substituted (18.6.2004 with application in accordance with s. 90(5) of the amending Act) by Finance Act 2004 (c. 12), s. 90(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)