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HMRC internal manual

Employment Related Securities Manual

HM Revenue & Customs
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Employment-related securities and options: exclusions: deaths

Death of employee

Securities cease to be “employment-related securities” immediately before the death of the employee. And there is no charge on employment-related securities options on or after death of the employee. So chargeable events occurring at or after death are not caught by the legislation in Chapters 2 to 5 Part 7 ITEPA 2003 (subsection (6) of ITEPA03/S421B and subsection (2) of ITEPA03/S477).

Death of associated person

The death of an associated person other than the employee does not prevent a charge.

Chargeable events before death

Death does not prevent a charge where the chargeable event was before the date of death.

In particular, for Chapter 3B (securities with artificially enhanced market value) in relation to shares acquired before death, subsection (4) of ITEPA03/S446O (meaning of “relevant period”) gives an end date immediately prior to death so that artificial increases during the employee’s lifetime are charged.