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Legislation
Income Tax (Earnings and Pensions) Act 2003

Crossheading Employment income

  • Section 554Z2 Value of relevant step to count as employment income
  • Section 554Z2A Exception to section 554Z2(1): close companies
  • Section 554Z3 Value of relevant step
  • Section 554Z4 Residence issues
  • Section 554Z4A Temporary non-residents
  • Section 554Z5 Overlap with money or asset subject to earlier tax liability
  • Section 554Z6 Overlap with certain earnings
  • Section 554Z7 Exercise price of share options
  • Section 554Z8 Cases where consideration given for relevant step
  1. Employment income
  2. Cases where consideration given for relevant step

Section 554Z8 | Cases where consideration given for relevant step F1F2

From legislation.gov.uk

(1)Subsection (2) applies if—

(a)the relevant step is a step within section 554C(1)(a) to (c),

(b)the relevant step is for consideration given by A in the form of the transfer of an asset to P from A,

(c)the transfer by A of the asset is made before, or at or about, the time the relevant step is taken and is not by way of a loan, and

(d)there is no connection (direct or indirect) between the transfer by A of the asset and a tax avoidance arrangement.

(2)The value of the relevant step (after any reductions under sections 554Z4 to 554Z6) is reduced (but not below nil) by—

(a)the market value of the asset transferred by A at the time of its transfer, or

(b)if the value of the relevant step was reduced under section 554Z4, X% of that market value.

(3)For the purposes of subsection (1)(d) it is (in particular) to be assumed that the transfer by A of the asset is connected with a tax avoidance arrangement if—

(a)before the transfer, the asset was transferred to A by another person by way of a loan, or

(b)the asset is, or carries with it, any rights or interests under the relevant arrangement or any arrangement which is connected (directly or indirectly) with the relevant arrangement.

(4)In subsection (3)(b) “the relevant arrangement” has the meaning given by section 554A(1)(b).

(5)Subsection (6) applies if—

(a)the relevant step is a step within section 554C(1)(b) or (c) or (e) or 554D and does not also involve a sum of money,

(b)the relevant step is for consideration given by A in the form of the payment of a sum of money to P by A, ...

(c)the payment is made before, or at or about, the time the relevant step is taken, andF2

(6)The value of the relevant step (after any reductions under sections 554Z4 to 554Z6) is reduced (but not below nil) by—

(a)the amount of the consideration given, or

(b)if the value of the relevant step was reduced under section 554Z4, X% of the amount of that consideration.

(7)In subsections (2)(b) and (6)(b) “X%” means the proportion of the value of the relevant step (as determined under section 554Z3) left after the reduction under section 554Z4.

(8)In this section references to A include references to any person linked with A.

Notes

  1. F1

    Pt. 7A inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 1

  2. F2

    S. 554Z8(5)(d) and word inserted (with effect in accordance with s. 18(9) of the amending Act) by Finance Act 2016 (c. 24), s. 18(3)

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