Income Tax (Earnings and Pensions) Act 2003 section 197

Minor definitions

Section 197 defines key terms used throughout the share-related income provisions, including what counts as an acquisition of shares, how market value is determined, and what constitutes payment for shares.

• The term "acquisition" is defined very broadly to prevent avoidance schemes designed to escape the tax charge on shares acquired through employment.
• Market value of shares is determined in accordance with the capital gains tax rules set out in Part 8 of the Taxation of Chargeable Gains Act 1992.
• Payment for shares includes not only cash payments but also payments made in kind or by any other means.
• A payment counts as such even where there is no legal obligation to make it, ensuring informal or voluntary arrangements are also captured.