The following Tax guidance note provides comprehensive and up to date legal information covering:
Determining whether an employment-related security exists is a crucial step in determining whether the specific (and sometimes punitive) income tax and National Insurance contributions (NICs) charges on employment-related securities arise.
The definition of an employment-related security is broad and can be broken into two key elements:
what is a security—which includes shares, debt, derivatives and interests in investment partnerships, and
is the security employment-related—which it is if the right or opportunity is available by reason of employment or made available by an employer
Securities are defined very widely and include the following:
shares (including stock) in any:
body corporate (whether UK or non-UK incorporated), or
non-UK unincorporated body
rights under contracts of insurance other than ‘excluded’ contracts of insurance (ie pension annuity contracts; long-term non-annuity insurance contracts with no surrender value; and general insurance contracts which are not treated under generally accepted accounting principles (GAAP) as financial assets or liabilities)
debentures, loan stock, bonds, certificates of deposit and other debt instruments (both company and government)
warrants and other instruments entitling holders to subscribe for (rather than purchase) securities—this:
includes warrants with additional rights (such as voting or dividend rights), but
excludes simple options to acquire shares falling within the definition of securities options provided that the securities option is not acquired because of
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