Income Tax (Earnings and Pensions) Act 2003 section 460

Cases outside charge under section 457

Section 460 provides an exemption from the tax charge on benefits from shares acquired through employment, where the employee has had no connection with the company for at least seven years before receiving the benefit.

• An exemption applies where the employee has not been a director or employee of the company (or an associated company) in the seven years before a benefit is received
• The relevant company is the one whose shares gave rise to the benefit in question
• The test is applied directly to the employee themselves, rather than to the person who actually receives the benefit
• This reflects the practical effect of connected persons rules, which would in any case trace the benefit back to the employee