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It is possible, by means of a joint election by employer and employee, to remove securities from the restricted securities regime¹.

The effect of the election is to ignore all restrictions and thus to bring into tax the full, unrestricted market value of the securities (or interest in securities) on acquisition. The legislation relating to acquisition and subsequent chargeable events (described in E4.507BA–E4.507D) is then specifically disapplied. Any increase beyond this initial unrestricted market value will be chargeable to capital gains tax.

This uplift in market value on acquisition may affect²:

1. Ìý

   •ÌýÌýÌýÌý the calculation of earnings from employment

2. Ìý

   •ÌýÌýÌýÌý the amount to be treated as earnings on the acquisition of employee shareholder shares³

3. Ìý

   •ÌýÌýÌýÌý the calculation of a gain realised on conversion of convertible securities

4. Ìý

   •ÌýÌýÌýÌý the operation of the provisions relating to the acquisition of securities for less than market value (see E4.507U)

5. Ìý

   •ÌýÌýÌýÌý the calculation of an amount to be treated