Conor Brindley considers the circumstances under which an employment income tax charge can arise on a share-for-share exchange
Where the disposal of shares in a company takes the form of a ‘paper-for-paper’ exchange or is part of a scheme of reconstruction it is easy to overlook the potential employment income tax and NIC charges which could arise by perhaps focusing too much on the relevant capital gains tax reliefs and/or confirming that the transactions in securities rules do not apply.
Such an oversight could be costly as there are no income tax or NIC reliefs which are directly equivalent to the capital gains tax reliefs. While the mere disposal of a share does not on its own trigger an employment income tax and/or a NIC charge if the shares being exchanged or otherwise disposed of (ie the shares in the target) are ‘employment-related...
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Conor Brindley considers the circumstances under which an employment income tax charge can arise on a share-for-share exchange
Where the disposal of shares in a company takes the form of a ‘paper-for-paper’ exchange or is part of a scheme of reconstruction it is easy to overlook the potential employment income tax and NIC charges which could arise by perhaps focusing too much on the relevant capital gains tax reliefs and/or confirming that the transactions in securities rules do not apply.
Such an oversight could be costly as there are no income tax or NIC reliefs which are directly equivalent to the capital gains tax reliefs. While the mere disposal of a share does not on its own trigger an employment income tax and/or a NIC charge if the shares being exchanged or otherwise disposed of (ie the shares in the target) are ‘employment-related...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
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