ERSM20250 - Employment-related securities and options: associated person and 'the box'

The term 바카라 사이트渁ssociated person바카라 사이트� is used throughout the legislation. Any person who acquires a security by reason of another바카라 사이트檚 employment is associated with the employee for these purposes, as is any other person connected with either that person or the employee. That group of people can be thought of as within a 바카라 사이트渂ox바카라 사이트�.

Disposal outside the 바카라 사이트榖ox바카라 사이트�

Various chargeable events can occur when disposing of the securities. The aim of the Part 7 legislation is to impose a charge when the securities are sold outside the box to a genuine third party. Hence the disposal charges are phrased along the lines of 바카라 사이트渄isposal otherwise than to another associated person바카라 사이트�. Of course, the employee is also an 바카라 사이트渁ssociated person바카라 사이트�.

Once the securities have been disposed of outside the 바카라 사이트渂ox바카라 사이트� (at which point a charge will generally have arisen) they cease to be within the provisions of Chapters 2 to 4A (subsection (5) of ITEPA03/S421B).

Associated person

The definition of 바카라 사이트渁ssociated person바카라 사이트� is set out in ITEPA03/S421C as:

  • the person who acquired the employment-related securities on the acquisition,
  • (if different) the employee, and
  • any relevant linked person.

Relevant linked person (from 18 June 2004)

A person is a 바카라 사이트渞elevant linked person바카라 사이트� if-

  • that person (on the one hand), and
  • either the person who acquired the employment-related securities on the acquisition or the employee (on the other),

are or have been connected or (without being or having been connected) are or have been members of the same household (see ITEPA03/S421C (2)).

The broad coverage of 바카라 사이트渉ousehold바카라 사이트� is intended to include modern personal relationships beyond the traditional family within marriage.

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Relevant linked person (before 18 June 2004)

Before 18 June 2004, a person is a 바카라 사이트渞elevant linked person바카라 사이트� if:

  • that person (on the one hand), and
  • either the person who acquired the employment-related securities on the acquisition or the employee (on the other),

are connected or, although not connected, are members of the same household.

The difference is that the earlier definition was in the present tense. The wording was taken advantage of in avoidance schemes. Under the new wording: once a person is a relevant linked person, he/she will always be a relevant linked person.

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Exception for employing company

A company which would otherwise be a relevant linked person is not one, per ITEPA03/S421C (3), if it is-

  • the employer,
  • the person from whom the employment-related securities were acquired,
  • the person by whom the right or opportunity to acquire the employment-related securities was made available, or
  • the person by whom the employment-related securities (or the securities in which they are an interest) were issued.

So, if the employer buys back the securities that will be a disposal to a non-associated person for tax purposes and a tax charge may therefore arise.

ITEPA03/S472 makes similar provision regarding associated persons and relevant linked persons for the securities options rules in Chapter 5 of Part 7.