Income Tax (Earnings and Pensions) Act 2003 section 226B

Deemed payment for employee shareholder shares

Section 226B provided for a deemed payment when an employee acquired shares under an employee shareholder agreement, but has been removed from the legislation for agreements entered into from December 2016 onwards.

• Section 226B was introduced by Finance Act 2013 as part of the employee shareholder share regime, which allowed employees to give up certain employment rights in exchange for shares in their employer's company.
• The section was omitted (effectively repealed) by Finance Act 2017, section 12(2), meaning it no longer applies to new employee shareholder agreements.
• The repeal takes effect for shares acquired under employee shareholder agreements entered into on or after 1 December 2016, with a limited exception for certain agreements entered into on 2 December 2016.
• The exception applies where the individual received the required independent advice on 23 November 2016 but before 1.30 pm on that day — in that case, the cut-off date is 2 December 2016 rather than 1 December 2016.

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