Ken Moody warns about the possible application of special tax rules for employment related securities in normal company transactions.
This article is intended to tackles the vexed subject of the application of Chapter 3D of the employment-related securities (ERS) rules to normal company transactions, and hopes (probably in vain) for some relaxation to this very onerous legislation.
The relevant legislation (ITEPA 2003, Pt 7, Ch 3D) applies, simply, where ERS are disposed other than to an ‘associated person’ for a consideration which is greater than ‘market value’.
What is ‘market value’?
The HMRC guidance on Chapter 3D in the Employment Related Securities Manual at ERSM80000 is not very helpful in practice. It harks back to the purpose of earlier legislation regarding ‘stop-loss’ arrangements by employers
