Income Tax (Earnings and Pensions) Act 2003 section 440

Amount of charge

Section 440 sets out how to calculate the taxable amount when a chargeable event occurs in relation to convertible employment-related securities.

• The taxable amount is calculated as the gain realised on the chargeable event (AG) minus the consideration paid and expenses incurred (CE)
• The gain (AG) is the amount of profit realised when the chargeable event occurs, with further detail provided by section 441
• The consideration (CE) covers any amount paid for the right to convert the securities plus any expenses connected with the conversion, disposal, release or receipt
• Where section 437 did not apply to adjust the initial charge, the taxable amount is reduced by the excess market value that was not previously accounted for, less any such reductions already claimed on earlier chargeable events