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HMRC internal manual

Employment Related Securities Manual

International from 6 April 2015: the relevant period - from 6 April 2015: securities acquired for less than market value other than pursuant to securities option

In a Chapter 3C case not involving a securities option, the relevant period is the tax year in which the notional loan (within the meaning of Chapter 3C) is treated as made or, if the notional loan is discharged in the same year, such that the amount discharged counts as employment income by virtue of ITEPA03/S446U(2) (see ERSM70150), then the relevant period starts with the beginning of the year and ends on the day of the discharge.

In general, this means that the relevant period will be the tax year in which the securities are acquired or, if shorter, the period from 6 April preceding (or simultaneous with) the acquisition of the securities to the date of their sale or of the release of the outstanding liability to pay for them.


On 1 May 2015 Stephen is awarded shares worth £1 each, but is only required to pay 10p per share initially. He is resident but not domiciled in the UK and meets the requirement of ITEPA03/S26A (ERSM162615) in the year of award (2015/16) and claims the remittance basis under ITA07/S809B in that year. On 1 September 2015 he is seconded to a foreign subsidiary of his employer’s group and becomes non-UK resident and carries out no UK duties from that point. On 31 March 2016 he is released from the obligation to pay the outstanding 90p on each share.

The relevant period is from 6 April 2015 to 31 March 2016.


There may be circumstances in which the employment income that arises from the discharge of a notional loan under Chapter 3C could be said to be earned over a different period. For example, an employer might decide to release an employee from a genuine, deferred obligation to pay for shares because of exceptional performance in a particular year. In such circumstances, a just and reasonable override could be used to establish the fair amount of foreign securities income, given that the income might reasonably be regarded as having been earned in the year of the exceptional performance rather than the year in which the employee originally acquired the shares on deferred purchase terms. See ERSM162700 for the operation of the just and reasonable override.