Corporation Tax Act 2009 section 1032

Meaning of "chargeable event"

Section 1032 defines what counts as a "chargeable event" for the purposes of the corporation tax relief rules on employee share acquisitions involving convertible securities.

• A chargeable event must satisfy three criteria simultaneously: it must be a chargeable event under the income tax employment income rules (ITEPA 2003), it must specifically involve conversion of securities, and it must meet additional share-related conditions
• The event must be a chargeable event as defined in section 438 of ITEPA 2003, which deals with tax charges arising on post-acquisition events relating to convertible securities held by employees
• The event must fall within section 439(3)(a) of ITEPA 2003, meaning it must specifically be the conversion of convertible securities into shares (as opposed to other types of chargeable event)
• The shares resulting from the conversion must meet the qualifying conditions set out in section 1008 (where relief was or would have been available under Chapter 2 for direct share acquisitions) or section 1016 (where relief was or would have been available under Chapter 3 for share options), with condition 3(f) of section 1016 being disregarded in the latter case