Publication of New Technical Guidance Manual on Employment-Related Securities

The new Employment-Related Securities Manual (ERSM) is released today. It contains guidance on the taxation of employment-related securities under Part 7 ITEPA 2003. Material is being released in instalments, with priority being given in this first release to guidance for the most common situations.

Where shares, loan stock, warrants, futures and other securities, or interests in these, are acquired in connection with an employment then they are employment-related securities. Options to acquire such securities are securities options. Part 7 ITEPA 2003 contains the rules for the taxation treatment (income tax/PAYE and NICs) for both employment-related securities and securities options.

The ERSM will provide guidance on this legislation, its interaction with other legislation and previous rules in this area. It will incorporate frequently asked questions, aspects of wider interest dealt with in discussions with customers and relevant guidance from the previous Share Schemes Manual.

The first release of material includes sections setting out the scope of the legislation as well as the taxation treatment of restricted securities, convertible securities and securities options. It also covers the requirements to report certain events involving employment-related securities, and a guidance booklet relating to university spinouts.

Further material will be released in due course to provide guidance on the remainder of the legislation within Part 7. The manual will be expanded and updated regularly to reflect new legislation, customer meetings and litigation which has become final. It will also incorporate material previously contained within our Frequently Asked Questions.

02 August 2005

Address: Claire Talbot
Employee Shares & Securities Unit
Room G/52
100 Parliament Street
London
SW1A 2BQ

Email: Share Schemes

Tel: 020 7147 2853