Skip to content
Solved
SearchBrowse
Sign in

Contents

Legislation
Income Tax (Earnings and Pensions) Act 2003

Crossheading Shares of employee shareholders

  • Section 226A Amount treated as earnings
  • Section 226B Deemed payment for employee shareholder shares
  • Section 226C Only one payment deemed to be made under associated agreements
  • Section 226D Shareholder or connected person having material interest in company
  1. Shares of employee shareholders
  2. Amount treated as earnings

Section 226A | Amount treated as earnings F1

From legislation.gov.uk

(1)This section applies if shares having a market value of no less than £2000 are acquired by an employee in consideration of an employee shareholder agreement.F1

(2)An amount equal to the market value of the shares is to be treated as earnings from the employment, in respect of the acquisition of the shares, for the tax year in which they are acquired.But this is subject to subsection (4).F1F2

(3)RepealedF1

(4)If the shares are acquired pursuant to an employment-related securities option, subsection (2) does not apply.F1

(5)If subsection (2) applies, nothing else constitutes earnings under this Part from the employment in respect of the acquisition of the shares.F1

(6)For the purposes of this section ...—F1

shares are “acquired” by an employee if the employee becomes beneficially entitled to them (and they are acquired at the time when the employee becomes so entitled);

“employee shareholder agreement” means an agreement by virtue of which an employee is an employee shareholder (see section 205A(1)(a) to (d) of the Employment Rights Act 1996);

“employee shareholder share” means a share acquired by an employee in consideration of an employee shareholder agreement;

“employee” and “employer company”, in relation to an employee shareholder agreement, mean the individual and the company which enter into the agreement;

“employment-related securities option” has the same meaning as in Chapter 5 of Part 7 (see section 471(5));

“market value” has the same meaning as it has for the purposes of TCGA 1992 by virtue of Part 8 of that Act; and the market value of shares is their market value on the day on which they are acquired (but see also subsection (7)).

(7)For the purposes of subsection (1) (but not subsection (2)) , the market value of the shares is to be determined ignoring—F1F3

(a)any election under section 431 (election for market value of restricted shares to be calculated as if not restricted), andF1

(b)section 437 (market value of convertible securities to be determined as if not convertible).F1

Notes

  1. F1

    Ss. 226A-226D and cross-heading inserted (1.9.2013) by Finance Act 2013 (c. 29), Sch. 23 paras. 3, 38; S.I. 2013/1755, art. 2

  2. F2

    Words in s. 226A(2) substituted (with effect in accordance with s. 12(5)-(7) of the amending Act) by Finance Act 2017 (c. 10), s. 12(1)(a)

  3. F3

    Words in s. 226A(7) inserted (with effect in accordance with s. 12(5)-(7) of the amending Act) by Finance Act 2017 (c. 10), s. 12(1)(d)

PreviousNext
PrivacyTerms