The following Corporation Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
The application of the restricted securities legislation is complex. This guidance note summarises the key tax implications and looks at some of the practical issues for employers in analysing and handling the potential risks associated with the acquisition of restricted securities by employees and directors in private and unlisted public companies.
The definition of securities is found within ITEPA 2003, s 420. It includes, amongst other things, shares (the most common type of security issued in a private company and the focus of this guidance note), loan stock, warrants and units in a collective investment scheme.
The restricted securities regime is most likely to be relevant where a director or employee acquires shares at less than market value (disregarding any restrictions on the shares) which are subject to compulsory transfer arrangements, such that the director / employee is required to sell the shares on leaving the employment for less than their market value at that time.
Restrictions are not limited to those contained in the company’s Articles of Association, but also include restrictions contained in any ‘contract, agreement, arrangement or condition’. For example, restrictions contained in shareholders agreements would be caught under the legislation.
Restrictions of any nature are covered if their effect is to decrease the market value of the shares. It includes:
Shares with intrinsic restrictions which are not expected
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