ERSM90230 - Post Acquisition Benefits from Securities

Exclusions: certain control situations

ITEPA03/S449 excludes from a Chapter 4 charge cases where the benefit is received in certain control situation - see [## Exclusions: certain control situations

ITEPA03/S449 excludes from a Chapter 4 charge cases where the benefit is received in certain control situation - see](/hmrc-internal-manuals/employment-related-securities/ersm20290) for detailed guidance.

Example 1: control test passed 바카라 사이트“ majority of shares of that class not employment related securities

A ferry company provides travel concessions to all its ordinary shareholders. 10% of the shares are held by employees and are employment-related securities, the remaining 90% are not. The minority employee shareholders are exempt from a Chapter 4 charge on the benefit of the travel concession, because a similar benefit is received by the owners of all the company바카라 사이트™s shares of that class and, immediately before receipt of that benefit, the majority of the company shares of that class are not employment-related securities (ITEPA03/S449 (3)).

Example 2: control test passed 바카라 사이트“ employee-controlled company

A manufacturing company is controlled by its employees through its single class of ordinary shares. It allows all shareholders to purchase goods produced by the company at 20% discount. No benefit is charged under Chapter 4 because a similar benefit is received by the owners of all the company바카라 사이트™s shares of that class and, immediately before receipt of that benefit, the company is employee-controlled by virtue of holdings of shares of that class (ITEPA03/S449 (2)). Such benefits may, of course, be taxed under the general benefits code.

Not all benefits taken up

Although the legislation requires a similar benefit to be received by all owners of the class of share, HMRC will accept that a right to a similar benefit given to all shareholders of that class of share, whether taken up or not, will satisfy this test바카라 사이트“ provided (as from 7 May 2004) that it is not part of a scheme for avoiding Income Tax or NIC.

Example 3: control test failed 바카라 사이트“ different classes of share

The founder of Newco exercises his control through owning ordinary shares, whilst the employees have A-ordinary shares without voting rights. A benefit, such as bonus shares, only provided to A-ordinary shareholders would not be excluded from Chapter 4 because:

    • the employees do not control the company through the A-ordinary shares,
    • the majority of A ordinary shares are employment-related securities