Income Tax (Earnings and Pensions) Act 2003 section 446B

Charge on acquisition

Section 446B imposes an income tax charge when employment-related securities have been artificially reduced in value before an employee acquires them.

• The charge applies where the market value of employment-related securities has been artificially depressed by at least 10% through non-commercial actions in the seven years before acquisition
• The taxable amount (calculated under section 446C) counts as the employee's employment income for the tax year in which the acquisition takes place
• The charge does not apply where the securities are restricted securities or restricted interests in securities that already fall outside the acquisition charge under section 425(2)
• This charge is additional to any other income tax liability arising on the acquisition under other provisions, such as those covering earnings, taxable benefits, acquisition by conversion, acquisition for less than market value, securities options, or third-party arrangements