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HMRC internal manual

Employment Related Securities Manual

Securities acquired for less than market value: date of effect

Notional loan

For most securities within Chapter 3C the notional loan is treated as coming into being at the time the securities are acquired. See ERSM20420 for time of acquisition.

Exception for forfeitable securities

Subsection (4) of ITEPA03/S446Q provides an exception to the rule above where ITEPA03/S425(2) (no charge on acquisition of forfeitable securities or forfeitable interests in securities) applies to the securities (see ERSM30370). In those circumstances the employment-related securities are treated as not acquired until the occurrence of the first chargeable event under ITEPA03/S427(3) in relation to the employment-related securities, being:

the employment-related securities ceasing to be restricted securities,

the variation of any restriction, or

the disposal for consideration of the employment-related securities.

It should be noted that it is the first chargeable event in relation to any restriction that brings Chapter 3C into effect, not just the restriction relating to forfeiture.

See Example 2 at ERSM70120.