Employment-related securities—basic tax principles
Employment-related securities—basic tax principles

The following Corporate guidance note provides comprehensive and up to date legal information covering:

  • Employment-related securities—basic tax principles
  • What is an employment-related security?
  • The general earnings charge on acquisition
  • Restricted securities and joint elections
  • Convertible securities
  • Subsequent chargeable events involving employment-related securities
  • Securities options
  • PAYE and NICs
  • Notional payments not made good—the section 222 charge
  • Reporting obligations

Various income tax and national insurance contributions (NICs) charges can arise for an employee or director in relation to the acquisition, ownership or disposal of employment-related securities. Associated PAYE and NICs obligations can also arise for the employing company.

What is an employment-related security?

A security (which includes shares, debt, derivatives and interests in investment partnerships) will be an employment-related security where the right or opportunity to acquire the securities (or interest in securities) is:

  1. available by reason of an employment of the person acquiring the securities (or interest) or any other person, or

  2. made available by a person's employer (or a person connected with a person's employer) (the deeming provision) unless such right or opportunit