Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

National Insurance Manual

From
HM Revenue & Customs
Updated
, see all updates

NICs avoidance: treating payments as earnings: gains from share options

Section 50(2) of the Social Security Act 1998

Section 4(4) of the Social Security Contributions and Benefits Act 1992

With effect from 6 April 1999 section 4(4) of the SSCBA 1992 was changed so that any gain on which an employee or director was chargeable to tax by virtue of section 135 (gains by directors and employees from share options) of ICTA 1988 was treated as remuneration from the employment.

Section 722 and paragraph 172(2) Schedule 6 Income Tax (Earnings and Pensions) Act 2003

ITEPA 2003 took effect from 6 April 2003. It amended section 4(4) of the SSCBA 1992 from that date to reflect ITEPA 2003. The effect of the legislation remained unchanged. The amount of the gain treated as employment income for income tax purposes was treated as earnings for NICs.

Section 140 and paragraph 48 Schedule 22 Finance Act 2003

Paragraph 10 of Schedule 22 to the FA 2003 replaced Chapter 5 of Part 7 of ITEPA 2003 about securities options with effect from 16 April 2003. A consequential change was made to section 4(4)(a) of the SSCBA 1992. The effect of the legislation remained unchanged. The amount of the gain treated as employment income for income tax purposes was treated as earnings for NICs.

Guidance - securities options

For guidance about the income tax position see ERSM110110.

For guidance about the NICs position see NIM06825.