Income Tax (Earnings and Pensions) Act 2003 section 426

Charge on occurrence of chargeable event

Section 426 establishes that when a chargeable event occurs in connection with employment-related securities (typically shares subject to conditions), an income tax charge arises on the employee in the tax year of that event.

• When a chargeable event occurs relating to employment-related securities, the resulting taxable amount is treated as the employee's employment income for the tax year in which the event takes place
• The meaning of "chargeable event", the calculation of the "taxable amount", and the identification of the "relevant tax year" are each defined by reference to further provisions in sections 427 and 428
• An employee who bears the cost of the employer's secondary Class 1 National Insurance contributions may claim relief against the amount that counts as employment income under this section
• Certain cases fall outside the scope of this charge altogether, as set out in section 429