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

Securities subject to restriction during relevant period

Section 446N provides a deduction to prevent double taxation where employment-related securities have been both restricted securities (taxable under Chapter 2) and subject to an artificial enhancement charge (under Chapter 3B) during the same relevant period.

• Where securities were restricted at any time during the relevant period, a deduction (DA) is made from the Chapter 3B charge on non-commercial increases calculated under section 446L (as modified by section 446M where applicable)
• DA is calculated for each Chapter 2 chargeable event during the relevant period as TA minus ARTA, where TA is the actual taxable amount under section 428 and ARTA is what that taxable amount would have been if non-commercial increases from the start of the relevant period to just before the chargeable event had been ignored
• Where there are multiple chargeable events, DA is the aggregate of all the individual TA minus ARTA calculations across the relevant period
• Both TA and ARTA must be reduced by any amount that qualifies as foreign securities income under section 41C, ensuring that only UK-taxable amounts are taken into account in the deduction calculation