Section 443 — Income Tax (Earnings and Pensions) Act 2003: Case outside charge under section 438

Case outside charge under section 438 443 1 Section 438 (charge on occurrence of chargeable event) does not apply if—

a the employment-related securities are shares (or an interest in shares) in a company of a class, b all the company’s shares of the class are convertible securities, ba subsection (1A) is satisfied, c all the company’s shares of the class (other than the employment-related securities) are affected by an event similar to that which is a chargeable event in relation to the employment-related securities, and d subsection (3) or (4) is satisfied. 1A This subsection is satisfied unless something which affects the employment-related securities has been done (at or before the time when section 438 would apply) 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.

2 For the purposes of subsection (1)(c) shares are affected by an event similar to that which is a chargeable event in relation to the employment-related securities—

a in the case of a chargeable event within section 439(3)(a) (conversion), if they are converted into securities of a different description, b in the case of a chargeable event within section 439(3)(b) (disposal), if they are disposed of, c in the case of a chargeable event within section 439(3)(c) (release of entitlement to convert), if the entitlement to convert them into securities of a different description is released, or d in the case of a chargeable event within section 439(3)(d) (receipt of benefit), if a similar benefit is received in respect of the entitlement to convert them.

3 This subsection is satisfied if, immediately before the event that would be a chargeable event, the company is employee-controlled by virtue of holdings of shares of the class.

4 This subsection is satisfied if, immediately before that event, the majority of the company’s shares of the class are not employment-related securities. 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .