Income Tax (Earnings and Pensions) Act 2003 section 446K

Application of this Chapter

Section 446K sets out when Chapter 3B applies, targeting situations where the market value of employment-related securities has been artificially increased through actions that lack genuine commercial purpose.

• The chapter applies where the market value of employment-related securities is increased by things done otherwise than for genuine commercial purposes
• Actions lacking genuine commercial purpose include anything done mainly to avoid tax or national insurance contributions, and non-arm's length transactions between companies in the same group (other than payments for group relief)
• A "group" for these purposes means a company and its 51% subsidiaries, and "group relief" takes its meaning from section 183(1) of the Corporation Tax Act 2010
• The section defines a "non-commercial increase" as an artificial rise in market value, and a "non-commercial reduction" as an artificial fall, where either results from actions not carried out for genuine commercial purposes