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HMRC internal manual

Employment Related Securities Manual

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HM Revenue & Customs
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Securities acquired for less than market value: date of departure from UK and split years

Residence

For periods up to 5 April 2013

ITEPA03/S421E(2) should be read in relation to the whole of the final year of residence in the UK without regard to Extra-Statutory Concession A11.

This means that where an employee, who is not UK-resident when granted a securities option which is in respect of UK duties, then becomes UK-resident and subsequently exercises the option at any point in the tax year during which he or she leaves the UK, the gain on exercise remains taxable under Part 7.

Periods from 6 April 2013 to 5 April 2015

Finance Act 2013 gave legislative effect to the application of ESC A11. (See ERSM20310 for guidance on split year treatment and Part 7 ITEPA03 and HMRC’s Guidance Note on the Statutory Residence Test -RDR3 (Website) for discussion of split year treatment in general.) New subsection (2A) of ITEPA03/S421E stipulates that Chapters 3A to 3D of Part 7 ITEPA03 apply to acquisitions of employment-related securities in the post-departure part of a split year if any earnings that there were, or might have been for any part of the whole tax year would have been general earnings to which section 15, 22 or 26 applied.

Periods from 6 April 2015

With effect from 6 April 2015, ITEPA03/S421E is repealed. For guidance on the effect of residence on charges under Part 7 generally, including Chapter 3C, from 6 April 2015 onwards, see ERSM162000.