Paragraph 25 I1

Section 1011 (acquisition of shares: relief if shares are restricted or convertible) is amended as follows.

In subsections (2) and (3), for “earnings of the employee within Chapter 1 of Part 3 of ITEPA 2003” substitute “ relevant earnings of the employee ”.

For subsection (4) substitute—

“(4)

For the purposes of subsections (2) and (3) “relevant earnings” means—

(a)

earnings within Chapter 1 of Part 3 of ITEPA 2003, and

(b)

any amount that is treated as earnings by virtue of section 226A of that Act (employee shareholder shares) (but see also section 1038B of this Act),

except that it does not include any amount of exempt income (within the meaning of section 8 of ITEPA 2003).”