Income Tax (Earnings and Pensions) Act 2003 section 525

No charge in respect of post-acquisition benefits

Section 525 provides relief from income tax on certain post-acquisition charges that would otherwise arise when shares acquired through a tax-relieved option exercise increase in value.

• This section complements section 524 by extending similar relief to post-acquisition benefits rather than the acquisition itself.
• It removes the income tax charge that would normally apply under section 449 (chargeable benefits from shares) and section 453 (charge on post-acquisition increases in value) when shares grow in value after acquisition.
• The relief only applies where the shares were originally acquired through a qualifying tax-relieved exercise that meets the conditions set out in section 524.
• The purpose is to ensure that employees who exercise approved share options are not penalised by additional tax charges simply because their shares increase in value after acquisition.