Income Tax (Earnings and Pensions) Act 2003 section 449

Case outside this Chapter

Section 449 sets out the circumstances in which the rules in Chapter 4 (post-acquisition benefits from securities) do not apply to shares received by employees.

• The exemption applies only where the securities are shares (or an interest in shares) of a particular class and all shareholders of that class receive a similar benefit
• The arrangements under which the shares were acquired must not have had tax or national insurance avoidance as a main purpose
• Either the company must be employee-controlled through holdings of that class of shares immediately before the benefit is received, or the majority of that class of shares must not be employment-related securities at that point
• All conditions must be met together — the share class and equal treatment test, the anti-avoidance test, and one of the two ownership tests