Income Tax (Earnings and Pensions) Act 2003 section 491

No charge on award of shares as taxable benefit

Section 491 provides that when shares are awarded under a share incentive plan, the employee is not subject to an income tax charge on the acquisition of those shares under the benefits code.

• When shares are awarded to an employee through a share incentive plan, no income tax charge arises under the benefits code provisions for share acquisitions
• This is the second of four provisions dealing with the tax advantages connected with the award of shares under share incentive plans
• The exemption applies specifically to the charge that would otherwise arise under Chapter 8 of Part 3 of the Act, which taxes employees on the acquisition of shares as a benefit
• Other tax charges, such as those arising under Chapter 9 of Part 3 (which deals with disposals of shares), are not affected by this exemption and may still apply