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

Application of this Chapter

Section 446X sets out the conditions under which a tax charge arises when employment-related securities are disposed of for more than their market value.

• This Chapter applies when an associated person disposes of employment-related securities so that no associated person retains beneficial entitlement to them
• A charge arises only where the consideration received for the disposal exceeds the market value of the securities at the time of disposal
• Both conditions — the full disposal by associated persons and the above-market-value consideration — must be met for the Chapter to apply
• The purpose is to capture as taxable employment income any excess value received over and above the open market worth of the securities