Finance Act 2013

Special charging rules for employment income

66(1)Section 421E (income relating to securities: exclusions about residence etc) is amended as follows.

(2)For subsection (1) substitute—

“(1)Chapters 2, 3 and 4 do not apply in relation to employment-related securities if the acquisition occurs in a tax year that is not a split year as respects the employee and—

(a)the earnings from the employment for that tax year are not general earnings to which section 15, 22 or 26 applies (earnings for year when employee UK resident), or

(b)had there been any earnings from the employment for that tax year, they would not have been general earnings to which any of those sections applied.

(1A)Chapters 2, 3 and 4 do not apply in relation to employment-related securities if the acquisition occurs in the UK part of a tax year that is a split year as respects the employee and—

(a)the earnings from the employment attributable to that part of the year are not general earnings to which section 15, 22 or 26 applies, or

(b)had there been any earnings from the employment attributable to that part of the year, they would not have been general earnings to which any of those sections applied.

(1B)Chapters 2, 3 and 4 do not apply in relation to employment-related securities if the acquisition occurs in the overseas part of a tax year that is a split year as respects the employee.”

(3)After subsection (2) insert—

“(2A)But Chapters 3A to 3D do apply in relation to employment-related securities in relation to which they are disapplied by subsection (2) if—

(a)the acquisition takes place in the overseas part of a tax year that is a split year as respects the employee,

(b)the tax year is a split year because the circumstances of the case fall within Case 1, Case 2 or Case 3 as described in Part 3 of Schedule 45 to FA 2013 (split year treatment: cases involving actual or deemed departure from the United Kingdom), and

(c)had it not been a split year—

(i)the earnings from the employment for that tax year (or some of them) would have been general earnings to which section 15, 22 or 26 applied, or

(ii)if there had been any earnings from the employment for that tax year, they (or some of them) would have been general earnings to which any of those sections applied.”