Income Tax (Earnings and Pensions) Act 2003 section 520

No charge in respect of post-acquisition benefits

Section 520 provides relief from income tax on certain post-acquisition charges that would otherwise arise when shares increase in value, where those shares were acquired through a tax-relieved exercise of share options under an approved SAYE (Save As You Earn) scheme.

• This section mirrors section 519 and applies the same principles to post-acquisition benefit charges rather than the initial benefit charge
• Where shares are acquired through a tax-relieved exercise of approved SAYE share options, specified income tax charges on increases in share value do not apply
• The relief ensures that employees are not taxed on value increases in shares they obtained through legitimate approved share option schemes
• An additional protection exists for SAYE option holders: even if approval is later withdrawn from the scheme, the option holder is still protected from these charges