EIM45060 - Employment income provided through third parties: relevant steps: Section 554C: overview

Section 554C ITEPA 2003

A relevant third person (P) takes a relevant step if (to summarise) the person:

  • pays a sum of money, transfers an asset, or grants a lease which is likely to have an effective duration exceeding 21 years, and
  • does so in favour of a ‘relevant person’.

Relevant steps within Section 554C

The actions listed below are relevant steps within Section 554C.

  • Section 554C(1)(a) P pays a sum of money to a ‘relevant person’.

Notice that ‘relevant third person’ and ‘relevant person’ are different concepts.

  • Section 554C(1)(b) P transfers an asset to a relevant person.
  • Section 554C(1)(c) P takes a step by which a relevant person acquires:
  • securities,
  • interests in securities, or
  • securities options.

In certain circumstances, P will also take a relevant step within Section 554C if:

  • Section 554C(1)(d) the person makes available a sum of money or asset, or
  • Section 554C(1)(e) the person grants a lease.

On Section 554C(1)(a), see EIM45065.

On Section 554C(1)(d), see EIM45070.

On Section 554C(1)(e), see EIM45075.

On ‘relevant person’, see EIM45090.

Acquiring securities, interests in securities and securities options

‘Securities’, ‘interests in securities’ and ‘securities options’ have the meanings given by Section 420 ITEPA 2003.

Under Section 421B(2)(a) ITEPA 2003, securities etc are ‘acquired’ at the time when the person acquiring them becomes beneficially entitled to them and not, if different, the time when they are conveyed or transferred.