Paragraph 17 Payments resulting from exercise, assignment or release of options which are not disregarded by virtue of paragraph 16F1

(1)

This paragraph applies to a payment—

(a)

made on or after 10th April 2003, and

(b)

which would otherwise fall to be disregarded by virtue of paragraph 16 F2or 16A of this Part,

where the market value of the shares has been increased by more than 10% by things done, on or after 6th April 1999, otherwise than for genuine commercial purposes.

(2)

For the purposes of sub-paragraph (1) “the shares” includes—

(a)

the shares subject to the right currently being exercised; and

(b)

where the right to acquire shares held on 6th April 1999 has been replaced by a F3replacement right, includes the shares subject to F4a replacement right.

(3)

The following are among the things that are, for the purposes of this paragraph, done otherwise than for genuine commercial purposes—

(a)

anything done as part of a scheme or arrangement the main purpose, or one of the main purposes, of which is the avoidance of tax or of contributions under the Act; and

(b)

any transaction between companies which, at the time of the transaction, are members of the same group on terms which are not such as might be expected to be agreed between persons acting at arm’s length.

(4)

But sub-paragraph (3)(b) does not apply to a payment for group relief within the meaning given in section 402(6) of the Taxes Act.

(5)

In sub-paragraph (3)(b) “group” means a body corporate and its 51% subsidiaries (within the meaning of section 838 of the Taxes Act), and other expressions used in this paragraph which are defined in, or for the purposes of, paragraph 16 have the same meaning here as they have in that paragraph.

Annotations

Textual amendments

F1: Sch. 3 para. 17 added (10.4.2003) by The Social Security (Contributions) (Amendment No. 3) Regulations 2003 (S.I. 2003/1059), regs. 1(1), 4(3)
F2: Words in Sch. 3 para. 17(1)(b) inserted (1.9.2003) by The Social Security (Contributions) (Amendment No. 5) Regulations 2003 (S.I. 2003/2085), regs. 1, 12(14)(a)
F3: Words in Sch. 3 para. 17(2)(b) substituted (1.9.2003) by The Social Security (Contributions) (Amendment No. 5) Regulations 2003 (S.I. 2003/2085), regs. 1, 12(14)(b)(i)
F4: Words in Sch. 3 para. 17(2)(b) substituted (1.9.2003) by The Social Security (Contributions) (Amendment No. 5) Regulations 2003 (S.I. 2003/2085), regs. 1, 12(14)(b)(ii)

Notes on the whole SI

Textual amendments

F1: See sections 3(2) and (5), 4(5) and (6), 116, 117, 118, 119 and 120 of the Social Security Contributions and Benefits Act 1992 (c. 4) (“the Act”) as amended respectively by paragraphs 3, 4, 22, 23, 24, 25 and 26 of Schedule 3 to the Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2) (“the Transfer Act”). The functions of the Department of Health and Social Services for Northern Ireland under the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7) and the Social Security Administration (Northern Ireland) Act 1992 (c. 8) were transferred to the Department for Social Development by Article 8(b) of and Part II of Schedule 6 to the Departments (Transfer and Assignment of Functions) Order (Northern Ireland) 1999 (S.R. 1999 No. 481).
F2: See section 176(2)(b) of the Act.

Notes on Part IX

Textual amendments

F1: Sch. 3 Pt. IX heading substituted (1.9.2003) by The Social Security (Contributions) (Amendment No. 5) Regulations 2003 (S.I. 2003/2085), regs. 1, 12(2)