Section 446T — Finance Act 2003: Amount of notional loan

Amount of notional loan 446T 1 The amount of the notional loan initially outstanding is— MV - DA where— MV is the market value of the employment-related securities at the time of the acquisition, and DA is the total of any deductible amounts.

2 Where the employment-related securities are, or are an interest in, securities which are not fully paid up, the reference in subsection (1) to the market value of the employment-related securities is to what it would be if the securities were fully paid up.

3 For the purposes of subsection (1) each of the following is a “ deductible amount ”—

a any payment made for the employment-related securities by the employee, and any payment so made by the person by whom they were acquired (if not the employee), at or before the time of the acquisition, b any amount that constitutes earnings from the employee’s employment under Chapter 1 of Part 3 (earnings) in respect of the acquisition of the employment-related securities, c if section 425(2) (no charge on acquisition of certain restricted securities or restricted interests in securities) applies in relation to the employment-related securities, any amount that counts as employment income of the employee under section 426 by reason of the first event which is a chargeable event for the purposes of that section in relation to the employment-related securities, d if the employment-related securities were acquired on a conversion of other employment-related securities, any amount that counts as employment income of the employee under section 438 (charge on conversion) by reason of the conversion, and e if the acquisition is pursuant to a securities option, any amount that counted as employment income of the employee under section 476 (acquisition of securities pursuant to securities option) in respect of the acquisition.

4 The amount of the notional loan outstanding at any subsequent time is the difference between—

a the amount initially outstanding, and b the amount of any payments or further payments made for the employment-related securities after the acquisition but before that time.