The convertible securities provisions are designed to tax rewards 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.
This 'shareholder' exclusion is constrained by anti-avoidance measures in FA 2004 and F(No 2)A 2005 (see below)2. The same constraints are applied to similar 'shareholder' exclusions relating to restricted securities (see E4.507E), securities acquired for less than market value (see E4.507V) and post acquisition benefits (see E4.508A). There are related
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