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Legislation
Income Tax (Earnings and Pensions) Act 2003

Crossheading Tax charge on post-acquisition chargeable events

  • Section 438 Charge on occurrence of chargeable event
  • Section 439 Chargeable events
  • Section 440 Amount of charge
  • Section 441 Amount of gain realised on occurrence of chargeable event
  • Section 442 Amount of consideration given for entitlement to convert
  • Section 442A Relief for secondary Class 1 contributions met by employee
  • Section 443 Case outside charge under section 438
  1. Tax charge on post-acquisition chargeable events
  2. Amount of gain realised on occurrence of chargeable event

Section 441 | Amount of gain realised on occurrence of chargeable event F1

From legislation.gov.uk

(1)This section applies for the purposes of section 440 (amount of charge on occurrence of chargeable event).F1

(2)The amount of the gain realised on the occurrence of an event that is a chargeable event by virtue of section 439(3)(a) (conversion) is—F1

Formula

CMVCS-(CMVERS+CC)

(3)The amount of the gain realised on the occurrence of an event that is a chargeable event by virtue of section 439(3)(b) (disposal) is—F1

Formula

DC-CMVERS

(4)The amount of the gain realised on the occurrence of an event that is a chargeable event by virtue of section 439(3)(c) (release of entitlement to convert) is the amount of the consideration received by an associated person in respect of the release.F1

(5)The amount of the gain realised on the occurrence of an event that is a chargeable event by virtue of section 439(3)(d) (receipt of benefit) is the amount or market value of the benefit.F1

(6)CMVCS—F1

(a)if the employment-related securities are securities, is the market value at the time of the chargeable event of the securities into which they are converted (determined, where those securities are themselves convertible securities, as if they were not), orF1

(b)if the employment-related securities are an interest in securities, is the same proportion of that market value as the market value of the interest in the securities in which the employment-related securities are an interest bears to the market value of those securities.F1

(7)CMVERS is the market value of the employment-related securities at the time of the chargeable event determined as if they were not convertible securities or an interest in convertible securities.F1

(8)CC is the amount of any consideration given for the conversion of the employment-related securities.F1

(9)DC is the amount of the consideration given on the disposal.F1

(10)Subsection (11) applies for the purposes of subsection (2) or (3) if—F1F2

(a)prior to the acquisition, the employment-related securities were the subject of a relevant step within the meaning of Part 7A by reason of which Chapter 2 of that Part applied in respect of the employment, andF1F2

(b)the amount mentioned in subsection (11)(a) is higher than the amount mentioned in subsection (11)(b).F1F2

(11)The amount of the gain realised is reduced (but not below nil) by the amount equal to—F1F2

(a)the amount that counted as employment income of the employee in respect of the employment under Chapter 2 of Part 7A, lessF1F2

(b)the market value of the employment-related securities when the relevant step was taken determined as if they were not convertible securities or an interest in convertible securities.F1F2

Notes

  1. F1

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

  2. F2

    S. 441(10)(11) inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 18

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