Income Tax (Earnings and Pensions) Act 2003 section 554E

Exclusions: steps under certain schemes etc.

Section 554E sets out the circumstances in which the disguised remuneration rules in Chapter 2 do not apply because the relevant step is taken under certain approved schemes, pension arrangements, or other specified arrangements.

• Relevant steps taken under tax-advantaged share schemes (SIP, SAYE, CSOP, EMI), registered pension schemes, overseas government pension schemes, excluded benefit arrangements, and certain holiday pay schemes are excluded from the disguised remuneration rules
• Steps taken solely to acquire, hold, or provide shares for tax-advantaged share schemes are also excluded, provided there is no connection to a tax avoidance arrangement and the shares held do not exceed the number reasonably needed over the next ten years
• If money or assets originally excluded under these provisions cease to be held solely for the qualifying share scheme purposes but remain earmarked for the individual, the disguised remuneration rules apply as if a new relevant step had been taken at that point
• Steps taken by the Independent Parliamentary Standards Authority in relation to a member of the House of Commons are also excluded from the disguised remuneration rules