Employment-related securities

Produced by a Tolley Personal Tax expert

Personal Tax

Guidance

Introduction

Employment-related securities (ERS) broadly means that the shares or securities in question are acquired in connection with an employment. The term ‘securities’ is widely defined in ITEPA 2003, s 420. ‘Securities’ includes shares, debentures, loan stock and financial instruments such as options, futures, contracts for differences and rights under contracts of insurance.

The ERS legislation is complex and it is not possible to cover all the areas comprehensively in this guidance note. This is an overview of the ERS legislation, focused on common scenarios, including potential pitfalls associated with ERS in a management buy-out (MBO). Links are included to Simon’s Taxes for further commentary, where appropriate.

The rules that govern the tax treatment of ERS are listed below:

Type of security	Legislation	Detailed commentary
Restricted securities	ITEPA 2003, ss 422–432	ERSM30000; Simon’s Taxes E4.507B–E4.507FA
Convertible securities	ITEPA 2003, ss 435–444	ERSM40000; Simon’s Taxes E4.507G–E4.507L
Securities with artificially depressed market value	ITEPA 2003, ss 446A–446J	ERSM50000; Simon’s Taxes E4.507M–E4.507QA
Securities with artificially enhanced market value	ITEPA 2003, ss 446K–446P	ERSM60000; Simon’s Taxes E4.507R–E4.507TA
Securities

Access this article and thousands of others like it
free for 7 days with a trial of Tolley+™ Guidance.

TAKE A FREE TRIAL

Popular Articles

Employment Tax

Company cars

Company carsIntroductionCompany cars are one of the most common taxable benefits. The rules for calculating the benefit are complex, and the reporting requirements are more onerous than most benefits. Company cars are covered by very specific legislation. Detailed guidance on each of the following

14 Jul 2020 11:15 | Produced by Tolley Read more

Personal Tax

Timing of disposal for capital gains tax

Timing of disposal for capital gains taxDate of disposalThe date of the disposal determines the period in which the gain is subject to capital gains tax (CGT). When the rates of CGT change, the determination of the date of disposal can also affect the rate of CGT that applies to the gain.See the

14 Jul 2020 13:50 | Produced by Tolley Read more

Year-end tax planning

Corporation Tax

Entity classification

Entity classificationImplications of entity classificationIf a subsidiary is established, it is important to determine how it will be treated for UK tax purposes as this will determine the basis on which it is taxed. A subsidiary may either be transparent (like a partnership, where the individual

14 Jul 2020 11:37 | Produced by Tolley in association with Anne Fairpo Read more

��Ӱ��