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

Exclusions: introduction to sections 554J to 554M

Section 554I introduces the exclusions in sections 554J to 554M, which can take certain earmarking steps for employee share schemes outside the disguised remuneration rules, and provides key definitions used in those sections.

• Sections 554J and 554K exclude earmarking steps relating to awards of shares, securities, or cash amounts linked to share values; sections 554L and 554M exclude earmarking steps relating to grants of rights to acquire shares, securities, or to receive cash linked to share values
• These exclusions only apply where the employer (B) is a company, and if B belongs to a group of companies the definition of "relevant shares" extends to shares, instruments, or collective investment scheme units connected with any group member
• "Relevant shares" covers shares or stock in B, certain securities instruments issued by B, and units in a collective investment scheme managed by B; a "trading company" is one whose business consists wholly or mainly of carrying on a trade
• An "exit event" for sections 554K and 554M includes a stock exchange listing, disposal of all or most shares to unconnected persons, transfer of the trade or assets to an unconnected person, commencement of winding up, or a change of control where no connected person takes over