Section 446E — Finance Act 2003: Charge on restricted securities

Charge on restricted securities 446E 1 This section applies where the market value of employment-related securities which are restricted securities or a restricted interest in securities is artificially low—

a immediately after an event which is a chargeable event in relation to the employment-related securities for the purposes of section 426 (charge on restricted securities), or b on 5th April in any year.

2 The market value of the employment-related securities is artificially low where it has been reduced by at least 10% as a result of things done otherwise than for genuine commercial purposes within the relevant period.

3 The reference in subsection (2) of section 428 (amount of charge on restricted securities) to what would be the market value of the employment-related securities is, so far as it relates to subsection (1) of that section, a reference to what would be the market value but for the reduction as a result of the things done as mentioned in subsection (2) (and but for any restrictions).

4 In a case within subsection (1)(b), there shall be treated as occurring on the 5th April concerned a chargeable event within section 427(3)(a) (lifting of restrictions) in relation to the employment-related securities. 5 “ The relevant period ” is the period of 7 years ending with—

a in a case within subsection (1)(a), the chargeable event concerned, or b in a case within subsection (1)(b), the 5th April concerned.

6 But if section 425(2) (no charge on acquisition of certain restricted securities or restricted interests in securities) applied in relation to the employment-related securities, the relevant period is the period beginning 7 years before the acquisition.