Section 446U Discharge of notional loan
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Amendments
Section 446U inserted by Finance Act 2003 section 140 and Schedule 22 para 7(1) in relation to securities and interests in securities acquired on or after 16 April 2003.
(1) The notional loan is treated as discharged when—
(a) the employment-related securities are disposed of otherwise than to an associated person, or
(b) if the employment-related securities were securities, or an interest in securities, not fully paid up at the time of the acquisition, the outstanding or contingent liability to pay for them is released, transferred or adjusted so as no longer to bind any associated person [or
(c) something which affects the employment-related securities is done as part of a scheme or arrangement the main purpose (or one of the main purposes) of which is the avoidance of tax or national insurance contributions.]1
Amendments
1 Para (c) and the word “or” preceding it inserted by Finance (No. 2) Act 2005 section 12 and Schedule 2 para 14 where something such as is mentioned in section 446U(1)(c) has been done on or after 2 December 2004.
(2) If the notional loan is discharged as the result of an event specified in subsection (1), the amount of the notional loan outstanding immediately before the occurrence of the event counts as employment income of the employee for the relevant tax year (whether or not the employment has terminated before or since the acquisition).
(3) The “relevant tax year” is the tax year in which the notional loan is treated as discharged.
(4) The notional loan is also treated as discharged when—
(a) payments or further payments for the employment-related securities equal to the amount initially outstanding in relation to them have been made by an associated person, or
(b) the employee dies.
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