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Income Tax (Earnings and Pensions) Bill


Income Tax (Earnings and Pensions) Bill

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      413        Exception in certain cases of foreign service

      414        Reduction in other cases of foreign service

General and supplementary provisions

      415        Valuation of benefits

      416        Notional interest treated as paid if amount charged for beneficial loan

Part 7

Employment income: share-related income and exemptions

Chapter 1

Introduction

      417        Scope of Part 7

      418        Other provisions about share-related income and exemptions

      419        Duties to provide information

      420        Negative amounts treated as nil

      421        Application of Part 7 to office-holders

Chapter 2

Conditional interests in shares

Introduction

      422        Application of this Chapter

      423        Interests in shares acquired “as a director or employee”

      424        Meaning of interest being “only conditional”

      425        Cases where this Chapter does not apply

Tax exemption

      426        No charge in respect of acquisition of employee’s interest in certain

circumstances

Tax charge

      427        Charge on interest in shares ceasing to be only conditional or on disposal

      428        Amount of charge

Supplementary provisions

      429        Amount or value of consideration given for employee’s interest

      430        Amount or value of consideration given for right to acquire shares

      431        Application of this Chapter where employee dies

      432        Duty to notify provision of conditional interests in shares

      433        Duty to notify events resulting in charges under section 427

      434        Minor definitions

 
 

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Chapter 3

Convertible shares

Introduction

      435        Application of this Chapter

      436        Shares acquired “as a director or employee”

      437        Cases where this Chapter does not apply

Tax charge

      438        Charge on conversion of shares

      439        Amount of charge

      440        Case outside charge under section 438: conversion of entire class

      441        Case outside charge under section 438: acquisition of conditional interest

Supplementary provisions

      442        Amount or value of consideration given for shares or conversion

      443        Amount or value of consideration given for right to acquire shares

      444        Conversion in consequence of employee’s death

      445        Duty to notify conversions of shares

      446        Minor definitions

Chapter 4

Post-acquisition benefits from shares

Introduction

      447        Application of this Chapter

      448        Cases where this Chapter does not apply

Tax charge where restrictions or rights varied

      449        Charge on occurrence of chargeable event

      450        Chargeable events

      451        Amount of charge

      452        Cases outside charge under section 449

Tax charge on increase in value of shares in dependent subsidiaries

      453        Charge on increase in value of shares of dependent subsidiary

      454        Chargeable increases

      455        Amount of charge

      456        Cases outside charge under section 453

Tax charge on other benefits from shares

      457        Charge on other chargeable benefits from shares

      458        Chargeable benefits

      459        Amount of charge

      460        Cases outside charge under section 457

 
 

Income Tax (Earnings and Pensions) Bill

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Supplementary provisions

      461        Related acquisitions of additional shares

      462        Company reorganisations etc.

      463        Disposals of shares to connected persons etc. ignored

      464        Application to interests in shares

      465        Duty to notify acquisitions of shares or interests in shares

      466        Duty to notify chargeable events and chargeable benefits

Interpretation

      467        Meaning of “dependent subsidiary”

      468        Meaning of “employee-controlled”

      469        Shares “held by outside shareholders”

      470        Minor definitions

Chapter 5

Share options

Introduction

      471        Share options to which this Chapter applies

      472        Introduction to taxation of share options

      473        Share options to which this Chapter does not apply

Receipt of share option

      474        No charge in respect of receipt of shorter-term option

      475        Value of longer-term option for purposes of liability to tax in respect of receipt

Tax charge on exercise, assignment or release of share option

      476        Charge on exercise, assignment or release of option by employee

      477        Charge on employee where option exercised, assigned or released by another

person

      478        Amount of charges

      479        Amount of gain realised by exercising option

      480        Amount of gain realised by assigning or releasing option

      481        Deductible amount in respect of secondary Class 1 contributions met by

employee

      482        Deductible amount in respect of special contribution met by employee

Supplementary provisions

      483        Extended meaning of “assign” and “release”

      484        Amount or value of consideration given for grant of share option

      485        Application of this Chapter where share option exchanged for another

      486        Duty to notify matters relating to share options

      487        Minor definitions

 
 

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Chapter 6

Approved share incentive plans

Introduction

      488        Approved share incentive plans (SIPs)

Scope of tax advantages

      489        Operation of tax advantages in connection with approved SIP

Tax advantages connected with award of shares

      490        No charge on award or acquisition of shares: general

      491        No charge on award of shares as taxable benefit

      492        No charge on partnership share money deducted from salary

      493        No charge on acquisition of dividend shares

Tax advantages connected with holding of shares

      494        No charge on removal of restrictions applying to shares

      495        No charge on increase in value of shares in dependent subsidiary

      496        No charge on cash dividend retained for reinvestment

Tax advantages connected with shares ceasing to be subject to plan

      497        Limitations on charges on shares ceasing to be subject to plan

      498        No charge on shares ceasing to be subject to plan in certain circumstances

Tax advantages: supplementary

      499        No charge in respect of incidental expenditure

Scope of tax charges

      500        Operation of tax charges in connection with approved SIP

Charges connected with holding of shares

      501        Charge on capital receipts in respect of plan shares

      502        Meaning of “capital receipt” in section 501

      503        Charge on partnership share money paid over to employee

      504        Charge on cancellation payments in respect of partnership share agreement

Charges connected with shares ceasing to be subject to plan

      505        Charge on free or matching shares ceasing to be subject to plan

      506        Charge on partnership shares ceasing to be subject to plan

      507        Charge on disposal of beneficial interest during holding period

      508        Identification of shares ceasing to be subject to plan

 
 

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PAYE

      509        Modification of section 696 where charge on shares ceasing to be subject to

plan

      510        Payments by trustees to employer company on shares ceasing to be subject to

plan

      511        PAYE deductions to be made by trustees on shares ceasing to be subject to

plan

      512        Disposal of beneficial interest by participant

      513        Capital receipts: payments by trustees to employer company

      514        Capital receipts: PAYE deductions to be made by trustees

Other tax consequences

      515        Tax advantages and charges under other Acts

Chapter 7

Approved SAYE option schemes

Introduction

      516        Approved SAYE option schemes

      517        Share options to which this Chapter applies

Tax advantages

      518        No charge in respect of receipt of option

      519        No charge in respect of exercise of option

      520        No charge in respect of post-acquisition benefits

Chapter 8

Approved CSOP schemes

Introduction

      521        Approved CSOP schemes

      522        Share options to which this Chapter applies

Tax advantages

      523        No charge in respect of receipt of option

      524        No charge in respect of exercise of option

      525        No charge in respect of post-acquisition benefits

Tax charge

      526        Charge where option granted at a discount

 
 

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Chapter 9

Enterprise management incentives

Introduction

      527        Enterprise management incentives: qualifying options

Tax advantages: receipt of option

      528        No charge on receipt of qualifying option

Tax advantages: exercise of option

      529        Scope of tax advantages: option must be exercised within 10 years

      530        No charge on exercise of option to acquire shares at market value

      531        Limitation of charge on exercise of option to acquire shares below market

value

Tax advantages where disqualifying events

      532        Modified tax consequences following disqualifying events

      533        Disqualifying events

      534        Disqualifying events relating to relevant company

      535        Disqualifying events relating to employee

      536        Other disqualifying events

      537        Alterations of share capital for purposes of section 536

      538        Share conversions excluded for purposes of section 536

      539        CSOP and other options relevant for purposes of section 536

Tax advantages: taxable benefits

      540        No charge on acquisition of shares as taxable benefit

Other income tax consequences

      541        Effects on other income tax charges

Chapter 10

Priority share allocations

Exemption where offer made to both public and employees

      542        Exemption: offer made to public and employees

      543        Discount not covered by exemption in section 542

Exemption where different offers made to public and employees

      544        Exemption: different offers made to public and employees

      545        Discount not covered by exemption in section 544

 
 

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Supplementary provisions

      546        Meaning of being entitled “on similar terms”

      547        Meaning and amount or value of “registrant discount”

      548        Minor definitions

Chapter 11

Supplementary provisions about employee benefit trusts

Introduction

      549        Application of this Chapter

Employee benefit trusts

      550        Meaning of “employee benefit trust”

      551        “Qualifying disposals” for purposes of section 550

Attribution of interests in company

      552        Attribution of interest in company to beneficiary or associate

      553        Meaning of “appropriate percentage” for purposes of section 552

      554        Attribution of further interest in company

Part 8

Former employees: deductions for liabilities

Deductions from total income

      555        Former employee entitled to deduction from total income

      556        Deductible payments made outside the time limits allowed

      557        Deductible payments wholly or partly borne by the former employer etc.

Interpretation

      558        Meaning of “deductible payment”

      559        Liabilities related to the former employment

      560        Meaning of “qualifying insurance contract”

      561        Connected contracts

      562        Meaning of “former employee” and “employment”

      563        Other interpretation

      564        Application of this Part to office-holders

Part 9

Pension income

Chapter 1

Introduction

      565        Structure of this Part

 
 

 
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