Section 446K — Finance Act 2003: Application of this Chapter

Application of this Chapter 446K 1 This Chapter applies in certain cases where the market value of employment-related securities is increased by things done otherwise than for genuine commercial purposes.

2 The following are among the things that are, for the purposes of this Chapter, done otherwise than for genuine commercial purposes—

a anything done as part of a scheme or arrangement the main purpose, or one of the main purposes, of which is the avoidance of tax or national insurance contributions, and b any transaction between companies which are members of the same group on terms which are not such as might be expected to be agreed between persons acting at arm’s length (other than a payment for group relief).

3 In subsection (2)(b)—

a “ group ” means a company and its 51% subsidiaries, and b “ group relief ” has the same meaning as in section 402(6) of ICTA.

4 In this Chapter, in relation to the market value of the employment-related securities— “ non-commercial increase ” means an increase in the market value as a result of anything done otherwise than for genuine commercial purposes, and “ non-commercial reduction ” means a reduction in the market value as a result of anything done otherwise than for genuine commercial purposes.