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E4.507M Securities with artificially depressed market value—overview

ITEPA 2003, ss 446A–446J, (Pt 7, Ch 3A) applies where the market value of employment-related securities (see E4.507A for definitions of 'market value' and 'employment-related securities') is reduced by 'things done otherwise than for genuine commercial purposes'¹. The reduction must be by at least 10% over the preceding seven years, see E4.507N.

When shares are acquired by employees, shares are converted, or changes are made to share rights (eg restrictions are lifted), any tax charge is normally based on the shares' fair market value at the relevant time. This anti-avoidance provision prevents 'artificial' depression of that market value; instead ensuring the employee is taxed on the full (non artifically-depressed) value.

As regards:

1. Ìý

   •ÌýÌýÌýÌý the charge on acquisition of securities with artificially depressed market value see E4.507N

2. Ìý

   •ÌýÌýÌýÌý restricted securities with artificially depressed market value see E4.507O

3. Ìý

   •ÌýÌýÌýÌý convertible securities with