BIM44360 - Specific deductions - employee share schemes: Providing shares under FA03/SCH23, a/c periods from 1 Jan 2003 - forfeitable, restricted or convertible shares: introduction

Special rules in FA03/SCH23 Parts 4 and 4A apply if employees acquire qualifying shares which are:

• Subject to restrictions in the form of a risk of being forfeited (“forfeitable shares”), or
• Subject to other kinds of restrictions (“other restricted shares”), or
• Convertible into other shares or securities (“convertible shares”).

From 1 September 2003

From 1 September 2003 these special rules broadly align the timing and amount of deductions for the employer under FA03/SCH23 with the timing of amounts taxable on the employee as employment income in respect of:

• the acquisition of the shares, and
• subsequent post-acquisition events.

The special rules in Part 4A also apply if employees acquire qualifying shares on conversion of other shares or securities.

Before 1 September 2003

Before 1 September 2003 only forfeitable shares were subject to special rules.

Contents

This section contains guidance on the following: