Where convertible shares have been received by reason of
employment before 17 March 1998 an income tax charge under the
normal rules for employment income will only apply before 1
September 2003 if the exercise of the conversion rights is within
the charge under ITEPA03/S476 (securities options), as the exercise
of a right to acquire shares, or there is evidence that the
conversion opportunity itself arises from or by reason of the
employment.
If on the facts of a particular case you consider that a
charge may arise in these circumstances, advice is available from
the Employee Shares & Securities Unit, Room G/52, 100
Parliament Street, London, SW1A 2BQ, or email
shareschemes@hmrc.gsi.gov.uk.
Where shares received by reason of employment before 17 March 1998 become convertible after that date a charge under ITEPA03/S438 as originally enacted will not arise on conversion. In such cases there may be a charge under ITEPA03/S447 on a benefit in connection with an employment-related security.
