The tax legislation governing the provision of shares, loan stock, warrants, futures and other securities, or interests in these, in connection with an employment is set out in the Income Tax (Earnings and Pensions) Act 2003. Much of this legislation is written in order to prevent tax avoidance and, as a result, the PAYE tax and NICs rules are some of the most complex that a payroll office may have to handle.

The publication, therefore, of HMRC's Employment-Related Securities Manual will provide welcome help with the serious compliance issues involved in the taxation treatment of employment-related securities and securities options.

The new online manual will provide guidance on this legislation, its interaction with other legislation and previous rules in this area. It will incorporate frequently asked questions, aspects of wider interest dealt with in discussions with customers and relevant guidance from the previous Share Schemes Manual.

Material is being released in instalments, with priority being given in this first release to guidance for the most common situations, including sections setting out the scope of the legislation as well as the taxation treatment of restricted securities, convertible securities and securities options. It also covers the requirements to report certain events involving employment-related securities, and a guidance booklet relating to university spinouts.

...back to 11 August 2005

Sources:
ERSM00010 - Employment-Related Securities Manual: Table of Contents

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