ERSM30060 - Restricted Securities

Taxation treatment: shares acquired between 26 October 1987 and 15 April 2003: exemption from charge

There are circumstances in which an event in one of the categories set out in ERSM30080 will have increased the value of shares acquired by an employee within ITEPA03/S451 (as originally enacted), but a charge to tax on employment income will not arise. The exceptions from the charge are designed to apply where either the:

• shareholder's relationship with the company is no longer that of an employee or director, the 7 year rule (see ERSM30070), or
• increase in value has benefited all shareholders in the class equally and because of the pattern of shareholdings in the company, can be accepted not to have been organised with a view to rewarding employees (see ERSM30080); and the conditions in ERSM30090 have been satisfied.