Finance (No. 3) Bill (HC Bill 200)

(11) The amount of the gain realised is reduced (but not below nil) by the
25amount equal to—

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

(b) the market value of the employment-related securities when
30the relevant step was taken determined as if they were not
convertible securities or an interest in convertible securities.”

19 In section 446B(4) (employment-related securities with artificially depressed
market value: charge on acquisition)—

(a) omit the “or” after paragraph (d), and

(b) 35after paragraph (e) insert “, or

(f) Chapter 2 of Part 7A (employment income provided
through third parties)”.

20 After section 446C(4) (employment-related securities with artificially
depressed market value: amount of charge) insert—

“(4A) 40Subsection (4B) applies if, 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.

(4B) If what would be MV in accordance with subsection (3) or (4) (as the
45case may be) is less than the amount that counted as employment
income of the employee in respect of the employment under Chapter

2 of Part 7A, MV is the amount of that employment income instead
of the amount determined in accordance with subsection (3) or (4).”

21 After section 446S(3) (employment-related securities acquired for less than
market value: notional loan) insert—

“(4) 5This section is not affected by section 554Z2(2).”

22 In section 446T(3) (employment-related securities acquired for less than
market value: amount of notional loan)—

(a) omit the “and” after paragraph (d), and

(b) after paragraph (e) insert “, and

(f) 10any amount that has counted as employment income
of the employee in respect of the employment under
Chapter 2 of Part 7A in relation to the employment-
related securities.”

23 In section 446V (employment-related securities acquired for less than
15market value: charges under Chapter 3C of Part 4 to be additional to other
charges)—

(a) omit the “or” after paragraph (d), and

(b) after paragraph (e) insert “, or

(f) Chapter 2 of Part 7A (employment income provided
20through third parties)”.

24 In section 452(2) (shares in research institution spin-out companies: market
value on acquisition)—

(a) omit the “and” after paragraph (c), and

(b) after paragraph (d) insert “, and

(e) 25determining 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)”.

25 In section 480(5) (employment-related securities options: deductible
30amounts)—

(a) omit the “and” after paragraph (b), and

(b) after paragraph (c) insert “, and

(d) any amount that has counted as employment income
of the employee in respect of the employment under
35Chapter 2 of Part 7A in relation to the employment-
related securities option or to any sum of money or
asset held solely for the purposes of the option.”

26 In section 567(5) (pension income: amount charged to tax) before “section
617” insert—

“(None) 40section 567A (deduction to avoid double taxation where
Part 7A has applied to the source of the pension income);”.

27 After section 567 insert—

“567A Cases in which Part 7A has applied to source of pension income

(1) This section applies if—