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

Disapplication of exceptions from charges

Section 446NA removes certain reliefs from income tax charges on employment-related securities where the market value of those securities has been artificially inflated by non-commercial means.

• Where the market value of employment-related securities has been increased by at least 10% through non-commercial increases in the 7 years before acquisition, the normal exemptions from charges on restricted securities, convertible securities, securities acquired below market value, and post-acquisition benefits do not apply
• The affected reliefs would normally take certain benefits received on company shares outside the scope of an income tax charge
• Non-commercial increases are those that artificially inflate the market value of the securities beyond what would result from normal commercial activity
• Where a charge under Chapter 3B (artificially enhanced market value) has already applied to the securities, the restricted securities exemption under section 429 is permanently disapplied for those securities going forward