Income Tax (Earnings and Pensions) Act 2003 Schedule 7 paragraph 43A

Pre-6th April 2003 acquisitions

Paragraph 43A provides transitional rules for applying the residence-based exclusion in section 421E to securities acquired before 6th April 2003, substituting references to the old Schedule E charging provisions in place of the current earnings terminology.

• Section 421E can exclude securities acquisitions from the employment-related securities tax charges in Chapters 2 to 4 of Part 7 where the employee was not UK-tax-resident at the relevant time.
• For acquisitions before 6th April 2003, the modern earnings-based wording in section 421E(1) is replaced with a reference to the employee not being chargeable under Case I of Schedule E in respect of the employment.
• Likewise, the modern wording in section 421E(2) is replaced with a reference to the emoluments of the employment not falling to be charged to income tax under Schedule E.
• These substitutions ensure that the residence exclusion test is applied using the tax concepts and terminology that were in force at the time the securities were originally acquired.