14 |
| Rules are provided for situations in which shares or other securities are replaced or added to or there is a change in the person’s interest. These rules give us expressions such as additional securities and replacement securities. |
16A.2.3 Exclusion |
First as to residence section 421E(1) makes chapters 2, 3 and 4 apply only if the employee was resident and ordinarily resident at the relevant time, which is the time of acquisition. The new chapters 3A–3D have a slightly wider rule—421E(2) referring to a charge arising under any of the provisions in sections 15–41. Section 421E goes on to make the residence rules apply to former employments—a 7 year rule applies. More formally, chapters 2–4 do not apply to a former employments if they would not have applied if the acquisition had taken place more than 6 years from the last year in which the employment was held. Similarly the rules only apply for prospective employments if they would have applied if the shares has been acquired when in the first year in which the employment is held. |
Next, the rules in chapters 2–4 do not apply to shares acquired under an offer made to the public.31 Just as importantly, the rules do not apply to matters within chapters 6–832 (421G), ie to shares awarded or acquired under an approved share incentive plan (chapter 6) acquired by the exercise of a share option acquired under an approved SAYE option scheme (chapter 7) or shares acquired by exercise of an option under an approved CSOP (chapter 8). There are definitions of employee controlled companies 421H(1) and associated company (the TA 1988 section 416 definition being used). Further, since some rules (chapters 2, 3 and 3A) refer to the acquisition of employment-related securities rules are needed to determine the consideration given for such acquisitions.33 |