Income Tax (Earnings and Pensions) Act 2003 section Schedule 7 paragraphs 28–29

Taxable benefits: notional loans in respect of acquisitions of shares

Section Schedule 7 paragraphs 28–29 deal with the transitional rules for taxable benefits arising from notional loans connected to share acquisitions, preserving the treatment of pre-2003 notional loans under the previous ICTA regime.

• The notional loan rules in Chapter 8 of Part 3 do not apply at all to share acquisitions made on or before 6 April 1976
• Where a share acquisition before 6 April 2003 created a notional loan under the old ICTA rules and that loan had not ended before that date, the loan is carried forward and treated as meeting the conditions for a notional loan under the new section 193 provisions
• The amount initially outstanding on any such carried-forward notional loan is taken to be the amount calculated under the old ICTA section 162 rules as at the 2002–03 tax year
• For periods before 6 April 2003, the rule on discharging the notional loan and treating amounts as earnings applies by reference to the old ICTA definition of relevant employment rather than the new Act's concept of an excluded employment

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