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Legislation
Income Tax (Earnings and Pensions) Act 2003

Crossheading Tax charge on post-acquisition chargeable events

  • Section 426 Charge on occurrence of chargeable event
  • Section 427 Chargeable events
  • Section 428 Amount of charge
  • Section 428A Relief for secondary Class 1 contributions met by employee
  • Section 429 Case outside charge under section 426
  • Section 430 Election for outstanding restrictions to be ignored
  • Section 430A Application of this Chapter where securities exchanged for further securities
  • Section 431 Election for full or partial disapplication of this Chapter
  • Section 431A Shares under tax advantaged plan or scheme
  • Section 431B Securities acquired for purpose of avoidance
  • Section 432 Definitions
  1. Tax charge on post-acquisition chargeable events
  2. Election for full or partial disapplication of this Chapter

Section 431 | Election for full or partial disapplication of this Chapter F1

From legislation.gov.uk

(1)The employer and the employee may elect in relation to employment-related securities which are restricted securities or a restricted interest in securities that—F1

(a)for the relevant tax purposes their market value at the time of the acquisition is to be calculated as if they were not, andF1

(b)sections 425 to 430 are not to apply to the employment-related securities.F1

(2)Or the employer and the employee may elect in relation to employment-related securities which are restricted securities or a restricted interest in securities that—F1

(a)for the relevant tax purposes their market value at the time of the acquisition is to be calculated, andF1

(b)sections 425 to 430 are to apply to the employment-related securities,F1

as if any specified restriction did not apply to the employment-related securities.

(3)For the purposes of subsections (1) and (2) “the relevant tax purposes” are—F1

(a)determining any amount that is to constitute earnings from the employment under Chapter 1 of Part 3 (earnings),F1

(aa)determining any amount that is to be treated as earnings from the employment where section 226A applies (employee shareholder shares: amount treated as earnings),F1F2

(b)determining the amount of any gain realised on the occurrence of an event that is a chargeable event by virtue of section 439(3)(a) (conversion),F1

(c)operating Chapter 3C of this Part (acquisition of securities for less than market value), ...F1

(d)determining any amount that counts as employment income of the employee under Chapter 5 of this Part (securities acquired pursuant to securities option) , andF1F3

(e)determining any amount that counts as employment income of the employee in respect of the employment under Chapter 2 of Part 7A (employment income provided through third parties)F1F3

(4)An election under this section—F1

(a)is to be made by agreement by the employer and the employee, andF1

(b)is irrevocable.F1

(5)Such an agreement—F1

(a)must be made in a form approved by the Commissioners for Her Majesty’s Revenue and Customs andF1F4

(b)may not be made more than 14 days after the acquisition.F1

(6)No election may be made under this section unless, at the time of the acquisition, the earnings from the employment are (or would be if there were any) general earnings to which any of the charging provisions of Chapters 4 and 5 of Part 2 applies.F1F5

Notes

  1. F1

    Pt. 7 Ch. 2 substituted (1.9.2003 with effect in accordance with Sch. 22 para. 3(2)-(4) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 3(1); S.I. 2003/1997, art. 2

  2. F2

    S. 431(3)(aa) inserted (1.9.2013) by Finance Act 2013 (c. 29), Sch. 23 paras. 6, 38; S.I. 2013/1755, art. 2

  3. F3

    S. 431(3)(e) and word inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 16(b)

  4. F4

    Words in Act substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 102(2); S.I. 2005/1126, art. 2(2)(h)

  5. F5

    S. 431(6) inserted (with effect in accordance with Sch. 9 para. 48 of the amending Act) by Finance Act 2014 (c. 26), Sch. 9 paras. 12, 47

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