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HMRC internal manual

Shares and Assets Valuation Manual

ITEPA: Background

This chapter outlines the procedures for dealing with requests for the valuation of employment – related securities for income tax purposes.

The instructions in the Employment Related Securities Manual (ERSM) take precedence on all technical, as opposed to valuation points.

The Schedule E legislation was consolidated in 2003 by the Income Tax (Earnings and Pensions) Act 2003 (ITEPA). However, almost immediately, Schedule 22 Finance Act 2003 introduced a new regime for securities (which includes shares and options over securities) that are used to remunerate employees, including directors.

The ‘normal rules’ charge from Schedule E is preserved in Part 3 Chapter 1 of ITEPA at section 62.

However, the other familiar Schedule E charges have been replaced with the new regime at Part 7 Chapters 1 – 5 ITEPA.

  Additional Guidance: SVM150000