Part 7

Employment income: income and exemptions relating to securities
Chapter 6

... share incentive plans

Charges connected with holding of shares

Charge on capital receipts in respect of plan shares
501
1
This section applies if conditions A and B are met.
2
Condition A is that a capital receipt is received by a participant in respect of, or by reference to, any of the participant’s plan shares.
3
Condition B is that the plan shares in respect of, or by reference to, which the capital receipt is received are—
a
free, matching or partnership shares that were awarded to the participant less than 5 years before the participant received the capital receipt, or
b
dividend shares that were acquired on behalf of the participant less than 3 years before the participant received the capital receipt.
4
If this section applies, the amount or value of the capital receipt counts as employment income of the participant for the relevant tax year.
5
The “relevant tax year” is the tax year in which the participant receives the capital receipt.
6
This section does not apply if the capital receipt is received by the participant’s personal representatives after the death of the participant.
7
Section 502 explains what is meant by a “capital receipt”.
Pt. 7: power to modify conferred (7.4.2005) by Finance Act 2005 (c. 7), s. 21(8)-(10)
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)
Word in Pt. 7 Ch. 6 title omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 2, 89 (with Sch. 8 paras. 90-96)