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House of Commons

Session 2002 - 03 Internet Publications Other Bills before Parliament

Income Tax (Earnings and Pensions) Bill

Income Tax (Earnings and Pensions) Bill xxiii
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
Income Tax (Earnings and Pensions) Bill xxiv
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 on 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 xxv
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
Income Tax (Earnings and Pensions) Bill xxvi
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
Income Tax (Earnings and Pensions) Bill xxvii
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
Income Tax (Earnings and Pensions) Bill xxviii
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
Income Tax (Earnings and Pensions) Bill xxix
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

© Parliamentary copyright 2002	Revised 4 December 2002