Any one of the following conditions must be met at the time of the event, if the events set out in ERSM30080 are not to be chargeable events (ITEPA03/S450 (as originally enacted)).
It is important to note that, for the purposes of the above
conditions, the class of shares being looked at is always the class
in which the employee holds the shares. This is because the charge
to tax is on shifts of value into shares of that class. But these
may result from changes to the rights or restrictions relating to
another class of shares.
The first condition above is to establish whether an increase
in the value of shares of the class in which the employee has a
holding is designed to benefit employees, or is simply a benefit to
the 'outsiders' who form the main body of holders of shares of that
class.
Where a company is controlled by its employees, directors and
employees will be in the majority, but value shifts may be designed
to benefit only a selected group of employees.
Where a company is a subsidiary company, directors and
employees will always be a minority. But if the subsidiary has more
than one class of shares there may be a movement of value from the
shares held by the parent into the shares held by the directors and
employees. Shifts of value from shares in the parent to shares in
the subsidiary, are covered by the 'dependent subsidiary' rules.
Only shares in 'independent' subsidiaries are within the scope of
the post-acquisition charge.
