Income Tax (Earnings and Pensions) Act 2003 section 504

Charge on cancellation payments in respect of partnership share agreement

Section 504 imposes an income tax charge when an individual receives money or other value as a result of the cancellation of a partnership share agreement.

• The section applies where an individual who has entered into a partnership share agreement receives money or money's worth on cancellation of that agreement
• The amount of money or the value of what is received is treated as employment income
• The income is taxed in the tax year in which the individual actually receives the money or money's worth
• This is the last of three charges connected with the holding of shares under a share incentive plan partnership share arrangement