18 |
| the shares in the class and the non employment related shares in that class are also affected by a similar event.45 |
If the market value has been manipulated in the ways envisaged under chapters 3A–3D. Charges may arise under those chapters. |
On CGT rules see TCGA 1992 section 119A and 149AA; on corporation tax rules see FA 2003 schedule 23. |
FA 2003 contains an election that all outstanding restrictions should be ignored so enabling the tax to be finalised—on the basis of the full unmanipulated value—instead of having to drag on until another chargeable event just because of some trivial condition.46 |
However section 431 goes even further and makes the application of the rules in chapter 2 a matter of election. Employer and employee may jointly elect that either all the restrictions or any specified restrictions should not apply.47 The effect of this is to open up the entire value to possible charges under the general principle in section 62 or under the rule for conversions in section 439 (3)(a) or under chapters 3C or 5. |
At one time, if the condition could be satisfied beyond the 5 year period there was an immediate charge when the shares were obtained. The charge has now been abolished for shares issued after the relevant date.48 |
16A.3.2 Convertible Securities: Charge on Conversion, Chapter 3 |
Rules creating a charge on the conversion of securities were originally introduced—in 199849—to supplement another charge, known as the growth in value charge50 (FA 1988 section 78) |