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14 January 2014 / Ken Moody
Issue: 4435 / Categories: Comment & Analysis , Employees , Income Tax

Recent changes to the employment-related securities guidance

KEY POINTS

  • Interpretation of market value on private company shares.
  • Is an outside investor deemed to be an employee?
  • The factual test should apply to all investors.
  • HMRC to refer to earlier guidance as inaccurate.

In reviewing my previous article on employment-related securities (ERS) it occurred to me that since then little has changed which directly impacts upon the rules in ITEPA 2003 part 7.

Unless otherwise stated references are to ITEPA 2003.

The final dénouement of HMRC v PA Holdings Ltd [2012] STC 582 rests with the Court of Appeal decision the company having abandoned its appeal to the Supreme Court.

However PA Holdings and subsequent similar decisions were not concerned with the ERS rules per se though part 7 chapter 4 (“Post-acquisition...

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