Mintues of a mini meeting with the Inland Revenue on 21 April 2004

Mintues of a mini meeting with the Inland Revenue on 21 April 2004 regarding:

  • New reporting requirements;
  • Inland Revenue source material – out-of-date material on Inland Revenue website;
  • when certain gains realised by the exercise of a replacement share option where the original option was obtained before 6 April 1999 can be disregarded under Paragraph 16A, Part 9, Schedule 3 of the SSCR 2001;
  • whether NICs are payable on cancellation of a capped option, or one granted in the capping period which is a rolled over option (includes worked examples);
  • time of acquisition of shares meaning of “acquiring a beneficial interest” under Chapter 5;
  • market value of partnerhship shares under SIPs;
  • Unapproved Options – whether there is tax on grant of an option to an employee not resident and ordinarily resident at the time of grant and whether there is tax (as discharge of a notional loan) where such shares are sold;
  • whether employees NICs payable in respect of shares acquired at an undervalue by non- residents and employer NICs where employer is not resident or present in the UK (considers Reciprocal Agreements and Double Contributions Conventions);
  • PAYE and NICs on the sale of a business;
  • Flotation issues – additional FAQs;
  • transfer pricing (in particular, transfer pricing within the UK);
  • implications of schemes of arrangement for SAYE schemes;
  • Definition of “restricted securities” – how to determine whether a restriction reduced the market value of a share thereby making it a “restricted security”.

Attached to these minutes are the following documents which relate to Question 4 (SIP – Partnership shares): (1) extract of letter to the Inland Revenue regarding what constitutes market value; (2) extract of letter to the Inland Revenue and the Inland Revenue response together with examples of rules; (3) copy minutes of Proshare meeting on 23 October 2002 and follow-up from that meeting; and (4) examples for Question 4.

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Keywords: Bad Leaver, Business sale, Cash cancellation, CGT, CGT reliefs, Change of Control, Corporation tax, Corporation tax deduction, CSOP, EBT, Employer's NICs, Forfeiture, HMRC compliant plans, Income tax, International, IPO, ITEPA 2003, NICs, PAYE, Plan limits, Restricted securities, Rights issue, Rollover, SAYE, Scheme of arrangement, Securities laws (international), Share valuation, SIP, Takeover, Tax reporting, Transfer pricing
Categories: Document archive, HMRC meetings