Modifications etc. (not altering text)
C1Pt. 12 applied by 2010 c. 8, s. 425(5) (as inserted (with effect in accordance with Sch. 5 para. 25(1)-(3) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 5 para. 1 (with Sch. 5 paras. 27, 32-34))
(1)This Chapter applies if—
(a)relief (“the original relief”) is available under Chapter 2 or 3 in relation to an acquisition of restricted shares, and
(b)after the acquisition—
(i)an event that is a chargeable event in relation to the restricted shares for the purposes of section 426 of ITEPA 2003 occurs, or
(ii)Chapter 2 of Part 7 of ITEPA 2003 ceases to apply to the restricted shares because the employee dies (see section 421B(4) and (6) of that Act).
For the purposes of paragraph (a) it does not matter if the amount of relief is calculated as nil.
(2)Relief under this Chapter is available to the employing company.
F1(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6)If—
(a)the original relief is available as a result of section 1015(3) (death of recipient), and
(b)the recipient is not the employee,
this Chapter applies as if the recipient were alive and the restricted shares were acquired by the recipient.
(7)If the original relief is available as a result of section 1022 (takeover of company whose shares are subject to an option), this Chapter applies as if the restricted shares were acquired pursuant to the qualifying option mentioned in that section.
(8)To find out what accounting period the relief is given for and how to calculate the amount of relief, see—
(a)section 1026 for relief available as a result of the occurrence of a chargeable event, and
(b)section 1027 for relief available as a result of the employee's death.
Those sections are supplemented by section 1028.
(9)Section 1029 provides for the relief to be given to a successor company if the qualifying business is transferred by group transfers.
Textual Amendments
F1S. 1025(3)-(5) omitted (with effect in accordance with Sch. 9 para. 48 of the amending Act) by virtue of Finance Act 2014 (c. 26), Sch. 9 paras. 32, 47
(1)This section applies if—
(a)a person (“E”) has, or had, an employment (“the overseas employment”) with a non-UK resident company not within the charge to corporation tax (“the overseas company”),
(b)E or another person acquired restricted shares because of the overseas employment (whether or not pursuant to an option),
(c)the case is not within section 1025(1)(a),
(d)relief under Chapter 2 or 3 would have been available to the overseas company in relation to the acquisition if, at all material times—
(i)the overseas company had carried on a business within subsection (2) (“a qualifying business”), and
(ii)the overseas employment had related to that business,
(e)E has a UK employment with a UK company (see subsections (3) and (4)),
(f)the UK employment is in relation to a qualifying business carried on by the UK company,
(g)an event occurs that is a chargeable event in relation to the restricted shares for the purposes of section 426 of ITEPA 2003, and
(h)because of the UK employment, an amount of employment income of E is charged to tax under ITEPA 2003 in relation to the chargeable event.
For the purposes of paragraph (d) it does not matter if the amount of the relief would have been calculated as nil.
(2)A business is within this subsection so far as—
(a)it is carried on by a company, and
(b)the company is within the charge to corporation tax in relation to the profits of the business or would be but for section 18A.
(3)A company is a “UK company” if it is a UK resident company or a non-UK resident company within the charge to corporation tax.
(4)E has a “UK employment” with a UK company if—
(a)E is employed by the UK company, or
(b)E is not employed by the UK company but provides, and is obliged to provide, personal service to the UK company, in the course of performing the duties of the overseas employment (in which case, references to the UK employment are to the personal service E provides).
(5)Relief under this Chapter is available to the UK company as a result of the chargeable event.
(6)References in this Chapter to the original relief (other than in section 1025B) are to be treated as references to the relief that would have been available as mentioned in subsection (1)(d).
(7)In section 1026(3) (amount of relief on occurrence of chargeable event), the reference to the employee is to be read as a reference to E.
(8)For the purposes of section 1028(2) (giving relief), as that provision has effect by virtue of subsection (6), in section 1013(2) to (5) or (as the case may be) 1021(2) to (5)—
(a)references to the employing company are to be treated as references to the UK company,
(b)the reference to the relevant employment is to be treated as a reference to the UK employment, and
(c)references to a business within section 1007(2) or (as the case may be) 1015(2) are to be treated as references to a business within subsection (2).
(9)If, in relation to the chargeable event, the amount of relief available would otherwise be more than the total amount of employment income of E charged to tax under ITEPA 2003, the amount of relief is (notwithstanding any other provision of this Chapter) limited to the total amount of that income so charged.
(10)If relief is available to more than one company as a result of the same chargeable event, relief may only be given to one of them in respect of that event.
Textual Amendments
F2Ss. 1025A, 1025B inserted (6.4.2015) by Finance Act 2014 (c. 26), Sch. 9 paras. 45, 47
(1)This section applies if the original relief is available under—
(a)Chapter 2 as a consequence of section 1007A, or
(b)Chapter 3 as a consequence of section 1015A or 1015B.
(2)If the original relief is available as a consequence of section 1007A or 1015B, subsection (2) of the section concerned applies for the purposes of this Chapter.
(3)If, in relation to a chargeable event, the amount of relief available would otherwise be more than the total amount of employment income of the employee charged to tax under ITEPA 2003, the amount of relief is (notwithstanding any other provision of this Chapter) limited to the total amount of that income so charged.
(4)If relief is available to more than one company as a result of the same chargeable event, relief may only be given to one of them in respect of that event.
(5)No relief is available as a result of the employee's death.]
Textual Amendments
F2Ss. 1025A, 1025B inserted (6.4.2015) by Finance Act 2014 (c. 26), Sch. 9 paras. 45, 47
(1)This section applies in relation to relief available as a result of the occurrence of a chargeable event.
(2)The relief is given for the accounting period in which the chargeable event occurs.
(3)The amount of relief is equal to the amount that counts as employment income of the employee under section 426 of ITEPA 2003 in relation to the chargeable event.
(4)For the purposes of subsection (3) the following are to be ignored—
(a)any relief under section 428A of ITEPA 2003,
(b)section 446E(6) of ITEPA 2003, and
(c)the amount of any non-commercial increase (as defined in section 446K(4) of ITEPA 2003) in the market value of the restricted shares after their acquisition.
F3(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Textual Amendments
F3S. 1026(5) omitted (with effect in accordance with s. 12(5)-(7) of the amending Act) by virtue of Finance Act 2017 (c. 10), s. 12(4)(f)
(1)This section applies in relation to relief available as a result of the employee's death.
(2)The relief is given for the accounting period in which the employee dies.
(3)The amount of relief is equal to the amount that would have counted as employment income of the employee under section 426 of ITEPA 2003 had a chargeable event within section 427(3)(c) of that Act occurred immediately before Chapter 2 of Part 7 of that Act ceased to apply to the restricted shares because of the employee's death.
(4)For the purposes of subsection (3)—
(a)the amount of expenses resulting from section 428(6) of ITEPA 2003 is to be treated as nil, and
(b)the following are to be ignored—
(i)sections 428(9) and 446E(6) of ITEPA 2003, and
(ii)the amount of any non-commercial increase (as defined in section 446K(4) of ITEPA 2003) in the market value of the restricted shares after their acquisition.
F4(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Textual Amendments
F4S. 1027(5) omitted (with effect in accordance with s. 12(5)-(7) of the amending Act) by virtue of Finance Act 2017 (c. 10), s. 12(4)(f)
(1)If section 1012 or 1020 (reduction in amount of relief) applies in relation to the original relief, that section applies in relation to the relief under this Chapter as it applies in relation to the original relief.
(2)For the purposes of the giving of the relief under this Chapter—
(a)if the original relief is available under Chapter 2, apply section 1013(2) to (5), and
(b)if the original relief is available under Chapter 3, apply section 1021(2) to (5).
(1)This section applies in relation to relief to be given under this Chapter if—
(a)during the interim period (see subsections (5) to (7)), the whole, or substantially the whole, of the qualifying business is transferred, and
(b)conditions A and B are met.
(2)Condition A is that—
(a)the transfer is a group transfer, or
(b)if there is more than one transfer, all the transfers are group transfers.
(3)Condition B is that, as a result of the transfer or transfers, at the end of the interim period—
(a)the whole, or substantially the whole, of the qualifying business is carried on by one company (“the successor company”) only and that company is not the employing company, or
(b)the whole, or substantially the whole, of the qualifying business is carried on by companies (“the successor companies”) none of which is the employing company.
(4)The relief is to be given to—
(a)the successor company, or
(b)whichever one of the successor companies is nominated by them,
instead of the employing company (and references to the employing company in section 1013(3) and (4) or 1021(3) and (4) (as applied by section 1028(2)) are to be read as references to the company to which the relief is to be given).
(5)“The interim period” is to be read in accordance with subsections (6) and (7).
(6)The interim period begins—
(a)if the original relief is available under Chapter 2, when the restricted shares are acquired, and
(b)if the original relief is available under Chapter 3, when the option is obtained.
(7)The interim period ends—
(a)if the relief under this Chapter is available as a result of the occurrence of a chargeable event, when the chargeable event occurs, and
(b)if the relief under this Chapter is available as a result of the employee's death, when the employee dies.