|
| |
|
lapses (in whole or in part) before the end of the final exercise |
| |
| |
(b) | correspondingly, no further relevant step is or will be taken |
| |
by P or any other person in relation to the shares or to any |
| |
sum of money or asset which (directly or indirectly) may |
| 5 |
arise or derive, or has arisen or derived, from the shares. |
| |
(15) | In subsections (10) to (14) “the final exercise date” means the date |
| |
which is five years after the grant date. |
| |
(16) | In subsections (6)(a)(ii), (8)(a)(ii) and (10)(a)(ii) “relevant income”, in |
| |
relation to any earmarked shares, means any income— |
| 10 |
(a) | which, before the relevant step is treated as being taken by |
| |
subsection (6), (8) or (10) (as the case may be)— |
| |
(i) | arises (directly or indirectly) from the shares, and |
| |
(ii) | is the subject of a relevant step within section 554B |
| |
taken by P by reason of which Chapter 2 would apply |
| 15 |
apart from section 554P, and |
| |
(b) | which, at the time the relevant step is treated as being taken, |
| |
continues to be held by or on behalf of P on the basis |
| |
mentioned in section 554B(1)(a) or (b). |
| |
554M | Exclusions: other cases involving employment-related securities etc |
| 20 |
(1) | Chapter 2 does not apply by reason of a relevant step the subject of |
| |
which is employment-related securities if— |
| |
(a) | by virtue of the step, the securities are acquired by a person, |
| |
| |
(b) | section 425(2) applies, or would apply apart from section |
| 25 |
421E(1), to the acquisition. |
| |
(2) | Chapter 2 does not apply by reason of a relevant step the subject of |
| |
which is an employment-related securities option if— |
| |
(a) | by virtue of the step, the option is acquired by a person, and |
| |
(b) | section 475(1) applies, or would apply apart from section |
| 30 |
474(1), to the acquisition. |
| |
(3) | Terms used in subsection (1) or (2) have the same meanings as they |
| |
have in Chapter 2 or 5 of Part 7 (as the case may be). |
| |
(4) | Chapter 2 does not apply by reason of an event within subsection (5) |
| |
if by virtue of the event an amount counts as employment income of |
| 35 |
A in respect of A’s employment with B. |
| |
(5) | The events within this subsection are— |
| |
(a) | a chargeable event for the purposes of section 426, 438 or 476, |
| |
(b) | an event which gives rise to the discharge of a notional loan |
| |
for the purposes of section 446U, or |
| 40 |
(c) | a disposal to which Chapter 3D of Part 7 applies. |
| |
(6) | Chapter 2 does not apply by reason of an event to which subsection |
| |
(4) would apply apart from section 421B(6), 421E(1), 474(1) or 477(2) |
| |
or apart from an election under section 430 or 431. |
| |
(7) | Chapter 2 does not apply by reason of a relevant step within |
| 45 |
554C(1)(a) taken by a person (“P”) if— |
| |
|
| |
|
| |
|
(a) | the payment of the sum of money is by way of a loan (“the |
| |
| |
(b) | the relevant loan is made and used solely for the purpose of |
| |
enabling A to exercise a share option, |
| |
(c) | the exercise of the option by A gives rise to employment |
| 5 |
income of A in respect of A’s employment with B— |
| |
(i) | which is chargeable to income tax, or |
| |
(ii) | which is exempt income, and |
| |
(d) | there is no connection (direct or indirect) between the |
| |
relevant step and a tax avoidance arrangement. |
| 10 |
(8) | In subsection (7) “share option” means a right to acquire shares |
| |
(including stock) in a company. |
| |
(9) | Subsection (10) applies if— |
| |
(a) | apart from subsection (7), Chapter 2 would apply by reason |
| |
of the relevant step mentioned in that subsection, and |
| 15 |
(b) | by the end of the relevant period, the relevant loan has not |
| |
| |
(10) | This Part has effect as if a relevant step within section 554C(1)(a) |
| |
were taken at the end of the relevant period— |
| |
(a) | the subject of which is a sum of money of an amount equal to |
| 20 |
the outstanding amount of the relevant loan as at the end of |
| |
| |
(b) | in relation to which the relevant person (within the meaning |
| |
of section 554C(1)) is the person to whom the relevant loan is |
| |
| 25 |
(c) | by reason of which Chapter 2 is to apply. |
| |
(11) | In subsections (9) and (10) “the relevant period” means the period |
| |
which runs from the time the relevant step mentioned in subsection |
| |
(7) is taken until the end of the 6th day of the month following the |
| |
month in which the step is taken. |
| 30 |
554N | Exclusions: employee car ownership schemes |
| |
(1) | This section applies if— |
| |
(a) | there is an arrangement (“the car ownership arrangement”) |
| |
| |
(i) | provides for A to purchase a new car from another |
| 35 |
person (“P”) using a loan (“the car loan”) to be made |
| |
to A by a licensed lender, |
| |
(ii) | specifies the date (“the repayment date”) by which the |
| |
car loan must be fully repaid which must be no later |
| |
than four years after the date on which the car loan is |
| 40 |
| |
(iii) | permits A, in order to obtain funds to repay the car |
| |
loan, to sell the car back to P on a specified date at a |
| |
specified price based on an estimate (made at the time |
| |
the car ownership arrangement is made) of the likely |
| 45 |
outstanding amount of the car loan on the specified |
| |
| |
(b) | as provided for by the car ownership arrangement, A |
| |
purchases the car using the car loan. |
| |
|
| |
|
| |
|
(2) | Chapter 2 does not apply by reason of a relevant step taken for the |
| |
| |
(a) | the purchase of the car or its sale-back as provided for by the |
| |
car ownership arrangement, or |
| |
(b) | the making of the car loan as so provided, |
| 5 |
| so long as the car ownership arrangement is not a tax avoidance |
| |
arrangement and there is no other connection (direct or indirect) |
| |
between the relevant step and a tax avoidance arrangement. |
| |
(3) | Subsection (4) applies if— |
| |
(a) | apart from subsection (2), Chapter 2 would apply by reason |
| 10 |
of the making of the car loan, and |
| |
(b) | by the end of the repayment date, the car loan has not been |
| |
| |
(4) | This Part has effect as if a relevant step within section 554C(1)(a) |
| |
were taken at the end of the repayment date— |
| 15 |
(a) | the subject of which is a sum of money of an amount equal to |
| |
the outstanding amount of the car loan as at the end of the |
| |
| |
(b) | in relation to which the relevant person (within the meaning |
| |
of section 554C(1)) is A, and |
| 20 |
(c) | by reason of which Chapter 2 is to apply. |
| |
| |
“car” has the meaning given by section 235(2), and |
| |
“licensed lender” means a person— |
| |
(c) | who is a licensee under the Consumer Credit Act 1974 |
| 25 |
acting within the terms of the person’s licence, and |
| |
(d) | who is not acting as a trustee. |
| |
554O | Exclusions: employment income exemptions under Part 4 |
| |
(1) | Chapter 2 does not apply by reason of a relevant step if an |
| |
employment income exemption under Part 4 applies to the subject of |
| 30 |
| |
(2) | If the employment income exemption applies to the subject of the |
| |
relevant step in part only, the relevant step is to be treated for the |
| |
purposes of this Part as being two separate relevant steps— |
| |
(a) | one in relation to the subject of the step so far as the |
| 35 |
exemption applies to it, and |
| |
(b) | one in relation to the subject of the step so far as the |
| |
exemption does not apply to it, |
| |
| with subsection (1) applying only in relation to the separate relevant |
| |
step mentioned in paragraph (a). |
| 40 |
(3) | In order to give effect to subsection (2), the sum of money or asset |
| |
which is the subject of the relevant step is to be apportioned between |
| |
the two separate relevant steps on a just and reasonable basis. |
| |
(4) | In this section “employment income exemption” includes the |
| |
exemption under section 271. |
| 45 |
|
| |
|
| |
|
554P | Exclusions: income arising from earmarked sum or asset |
| |
(1) | This section applies if— |
| |
(a) | a sum of money or asset (“sum or asset R”) is held by or on |
| |
behalf of a person (“P”), |
| |
(b) | income arises from sum or asset R, and |
| 5 |
(c) | when the income arises, it— |
| |
(i) | is received by or on behalf of P, and |
| |
(ii) | is the subject of a relevant step within section 554B |
| |
| |
(2) | Chapter 2 does not apply by reason of the relevant step mentioned in |
| 10 |
subsection (1)(c)(ii) if— |
| |
(a) | before the income arises, sum or asset R was the subject of a |
| |
relevant step within section 554B taken by P, |
| |
(b) | Chapter 2 applied by reason of the relevant step mentioned |
| |
in paragraph (a) in respect of A’s employment with B or |
| 15 |
would have so applied apart from this section or section 554Q |
| |
or any of sections 554H to 554L or section 554S, |
| |
(c) | immediately before the income arises, sum or asset R is still |
| |
earmarked or otherwise held on the basis mentioned in |
| |
| 20 |
(d) | subsection (3) does not apply. |
| |
(3) | This subsection applies if it is reasonable to suppose that, taking into |
| |
account the type of investments from which the income derives |
| |
(directly or indirectly), in essence, the income represents a return |
| |
from sum or asset R which exceeds the return which might be |
| 25 |
expected applying the assumption that all relevant connected |
| |
persons are acting at arm’s length of each other. |
| |
(4) | In subsection (3) “relevant connected person” means a person with a |
| |
connection (direct or indirect) to the arrangement under which the |
| |
| 30 |
554Q | Exclusions: acquisitions out of earmarked sums or assets |
| |
(1) | This section applies if— |
| |
(a) | a sum of money or asset (“sum or asset S”) is held by or on |
| |
behalf of a person (“P”), |
| |
(b) | a sum of money or asset (“sum or asset T”) is acquired by or |
| 35 |
on behalf of P wholly out of sum or asset S, |
| |
(c) | sum or asset T is not acquired (directly or indirectly) from A |
| |
or any person linked with A, and |
| |
(d) | on its acquisition, sum or asset T is the subject of a relevant |
| |
step within section 554B taken by P. |
| 40 |
(2) | The cases covered by subsection (1)(b) include (in particular) cases in |
| |
which sum or asset T represents the proceeds of the disposal of sum |
| |
| |
(3) | Chapter 2 does not apply by reason of the relevant step mentioned in |
| |
| 45 |
(a) | before the acquisition, sum or asset S was the subject of a |
| |
relevant step within section 554B taken by P, |
| |
|
| |
|
| |
|
(b) | Chapter 2 applied by reason of the relevant step mentioned |
| |
in paragraph (a) in respect of A’s employment with B or |
| |
would have applied apart from this section or section 554P or |
| |
| |
(c) | immediately before the acquisition, sum or asset S is still |
| 5 |
earmarked or otherwise held on the basis mentioned in |
| |
| |
(d) | subsection (4) does not apply. |
| |
(4) | This subsection applies if it is reasonable to suppose that, in |
| |
| 10 |
(a) | at the time of the acquisition, the value of sum or asset T is |
| |
greater or less than the value of sum or asset S, and |
| |
(b) | the difference in the values might not have been expected |
| |
applying the assumption that all relevant connected persons |
| |
are acting at arm’s length of each other. |
| 15 |
(5) | In subsection (4)(b) “relevant connected person” means a person |
| |
with a connection (direct or indirect) to the arrangement under |
| |
which sum or asset T is acquired. |
| |
(6) | Subsection (7) applies if— |
| |
(a) | subsection (3) applies to the relevant step mentioned in |
| 20 |
subsection (1)(d) or would have applied had the words “or |
| |
any of sections 554H to 554L” been inserted after “554S” in |
| |
| |
(b) | for the sole purpose of the acquisition, sum or asset S or sum |
| |
or asset T is the subject of a relevant step within section |
| 25 |
| |
(7) | Chapter 2 does not apply by reason of the relevant step mentioned in |
| |
| |
554R | Exclusions: pension income chargeable under Part 9 etc |
| |
(1) | Chapter 2 does not apply by reason of a relevant step within section |
| 30 |
554C or 554D if the step is the provision of pension income which is |
| |
chargeable to income tax under Part 9 or is exempt income (within |
| |
the meaning of that Part). |
| |
(2) | Sections 554S, 554T, 554U, 554V and 554W contain further provision |
| |
relating to retirement benefits etc and are to be applied, so far as |
| 35 |
applicable, in that order. |
| |
554S | Exclusions: employee pension contributions |
| |
(1) | Chapter 2 does not apply by reason of a relevant step within section |
| |
554B if the sum of money or asset which is the subject of the step |
| |
arises or derives (whether wholly or partly or directly or indirectly) |
| 40 |
from an excluded pension contribution paid by A on or after 6 April |
| |
| |
(2) | If the sum of money or asset arises or derives from the excluded |
| |
pension contribution only partly, the relevant step is to be treated for |
| |
the purposes of this Part as being two separate relevant steps— |
| 45 |
(a) | one in relation to the sum of money or asset so far as it arises |
| |
or derives from the excluded pension contribution, and |
| |
|
| |
|
| |
|
(b) | one in relation to the sum of money or asset so far as it does |
| |
not arise or derive from the excluded pension contribution, |
| |
| with subsection (1) applying only in relation to the separate relevant |
| |
step mentioned in paragraph (a). |
| |
(3) | Chapter 2 does not apply by reason of a relevant step within section |
| 5 |
554C or 554D if the sum of money or asset which is the subject of the |
| |
| |
(a) | represents relevant benefits, and |
| |
(b) | arises or derives (whether wholly or partly or directly or |
| |
indirectly) from an excluded pension contribution paid by A. |
| 10 |
(4) | If the sum of money or asset arises or derives from the excluded |
| |
pension contribution only partly, the relevant step is to be treated for |
| |
the purposes of this Part as being two separate relevant steps— |
| |
(a) | one in relation to the sum of money or asset so far as it arises |
| |
or derives from the excluded pension contribution, and |
| 15 |
(b) | one in relation to the sum of money or asset so far as it does |
| |
not arise or derive from the excluded pension contribution, |
| |
| with subsection (3) applying only in relation to the separate relevant |
| |
step mentioned in paragraph (a). |
| |
(5) | In order to give effect to subsection (2) or (4), the sum of money or |
| 20 |
asset which is the subject of the relevant step is to be apportioned |
| |
between the two separate relevant steps on a just and reasonable |
| |
| |
(6) | For the purposes of this section an excluded pension contribution is |
| |
| 25 |
(a) | which is made to an arrangement by A by way of a payment |
| |
| |
(b) | by virtue of which A acquires rights to receive relevant |
| |
benefits under the arrangement (and nothing else), |
| |
(c) | which is neither a relievable pension contribution nor a tax- |
| 30 |
relieved contribution, and |
| |
(d) | which is not a repayment of any loan and otherwise has |
| |
nothing to do with any loan and has nothing to do with a sum |
| |
of money or asset which has been the subject of a relevant |
| |
step within section 554C(1)(d). |
| 35 |
| |
“relevant benefits” has the same meaning as in Chapter 2 of Part |
| |
6, but ignoring section 393B(2)(a), |
| |
“relievable pension contribution” means a contribution in |
| |
respect of which an individual is entitled to relief under |
| 40 |
section 188 of FA 2004, and |
| |
tax-relieved contribution” has the meaning given by paragraph |
| |
3(3) of Schedule 34 to FA 2004. |
| |
554T | Exclusions: pre-6 April 2006 contributions to employer-financed |
| |
retirement benefit schemes |
| 45 |
(1) | This section applies if the subject of a relevant step is a sum of money |
| |
or asset which has (wholly or partly) arisen or derived (directly or |
| |
indirectly) from a sum of money (“the taxed sum”)— |
| |
|
| |
|
| |
|
(a) | which was paid by B in accordance with an employer- |
| |
financed retirement benefits scheme (within the meaning of |
| |
Chapter 2 of Part 6) with a view to the provision of benefits |
| |
| |
(b) | in respect of which A is taxed. |
| 5 |
(2) | For the purpose of determining whether A is taxed in respect of a |
| |
sum of money, paragraph 53(3) of Schedule 36 to FA 2004 applies as |
| |
it applies for the purpose of determining whether an employee is |
| |
taxed for the purposes of paragraph 53(1)(b) of that Schedule. |
| |
(3) | Chapter 2 does not apply by reason of the relevant step. |
| 10 |
(4) | Subsection (5) applies if the sum of money or asset which is the |
| |
subject of the relevant step only partly arises or derives from the |
| |
| |
(5) | The relevant step is to be treated for the purposes of this Part as being |
| |
two separate relevant steps— |
| 15 |
(a) | one in relation to the sum of money or asset so far as it arises |
| |
or derives from the taxed sum, and |
| |
(b) | one in relation to the sum of money or asset so far as it does |
| |
not arise or derive from the taxed sum, |
| |
| with subsection (3) applying only in relation to the separate relevant |
| 20 |
step mentioned in paragraph (a). |
| |
(6) | In order to give effect to subsection (5), the sum of money or asset |
| |
which is the subject of the relevant step is to be apportioned between |
| |
the two separate relevant steps on a just and reasonable basis. |
| |
(7) | If B is a company and is a member of a group of companies at any |
| 25 |
time (“the relevant time”), in subsection (1)(a), in relation to any sum |
| |
of money paid at the relevant time, the reference to B is to be read as |
| |
including a reference to any other company which is a member of |
| |
that group at the relevant time. |
| |
554U | Exclusions: purchases of annuities out of pension scheme rights |
| 30 |
(1) | This section applies if— |
| |
(a) | an annuity contract is purchased from an insurance company |
| |
wholly out of rights which A has under a pension scheme, |
| |
| |
(b) | A’s rights out of which the annuity contract is purchased are, |
| 35 |
wholly or partly, pre-6 April 2011 annuity rights. |
| |
| |
(a) | takes a relevant step for the sole purpose of purchasing the |
| |
annuity contract or transferring the beneficiary’s rights |
| |
under the annuity contract to A or a person linked with A, or |
| 40 |
(b) | on the purchase of the annuity contract, otherwise takes a |
| |
relevant step within section 554B the subject of which is the |
| |
beneficiary’s rights under the annuity contract, |
| |
| Chapter 2 does not apply by reason of the relevant step. |
| |
(3) | If the insurance company— |
| 45 |
(a) | takes a relevant step for the sole purpose of selling the |
| |
| |
|
| |
|