Income Tax (Earnings and Pensions) Act 2003 section 543

Discount not covered by exemption in section 542

Section 543 deals with situations where a director or employee receives shares at a price that, even after accounting for any registrant discount, is lower than the price paid by the general public, and ensures that the additional benefit is not exempt from tax.

• Where the total of the price paid by a director or employee for allocated shares plus any registrant discount is less than the fixed price or lowest successful tender price, the difference is not covered by the section 542 exemption
• The benefit represented by that difference remains taxable as employment earnings
• Any registrant discount (as defined in section 547) is disregarded when calculating the taxable amount
• This provision prevents directors and employees from obtaining a tax-free advantage beyond the standard priority allocation benefit available under section 542

---