22 |
Where a charge under chapter 2 would arise (post acquisition charges on restricted securities) it is excluded in favour of the charge under 3A.65 If the securities are convertible and so come within chapter 3, the value for 3A is to be determined as if they were not convertible so leaving the convertibility increase to be dealt with under chapter 3.66 |
16A.4.1.2 Other Tax Charges |
The section 426 charge on restricted securities applies if the market value of the employment related securities has been reduced by 10% within the period of 7 years ending with the chargeable event.67 It also imposes a charge if the value is artificially low on 5 April of any year.68 |
16A4.1.3 Conditional Interests |
The legislative technique used here is different. Where the employee has a conditional interest in the shares and a chargeable event occurs but an artificial reduction, the necessary adjustments are made to the post chargeable event market value. This means that the charge still arises under sections 427 or 428 by reference to the adjusted value and not under 3A itself. |
Convertible securities under chapter 3 receive similar treatment. The charge under 439(3)(a) is based on the fair not depressed value;69 there are consequential changes to the value of the consideration or benefit received.70 |