The restricted securities provisions are designed to tax share incentives obtained by employees. It would be wrong, therefore, for employees to be charged to income tax on the occurrence of a particular event when that event applies to all shareholders, regardless of whether they are employees. Certain events, which would otherwise be chargeable events, are therefore excluded from the charge to tax1.
Since its original drafting in FA 2003, this 'shareholder' exclusion has been restricted by anti-avoidance measures in FA 2004 and F(No 2)A 2005 (see below)2. The same restrictions were applied to similar 'shareholder' exclusions relating to convertible securities (see E4.507L), securities acquired for less than market value (see E4.507V) and post acquisition benefits (see E4.508A). There are related provisions denying these 'shareholder' exclusions in relation to
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