Convertible securities

Produced by Tolley in association with

Employment Tax

Guidance

STOP PRESS: The remittance basis is to be abolished from 6 April 2025, although this only applies to foreign income and gains arising on or after that date. The remittance basis rules still apply to unremitted income and gains arising before that date but remitted later. The legislation is included in Finance Bill 2025. For more details, see the Abolition of the remittance basis from 2025/26 guidance note.

Overview

Shares or securities may have certain rights to convert into other types of shares or securities on specific events or may be subject to certain conditions. Where the securities are also employment related securities (ERS), they may be considered to be ‘convertible securities’ under ITEPA 2003, ss 435–444 (Pt 7, Ch 3). See the Employment related securities overview note for the definition of ERS.

On conversion, the value of the shares or securities may increase so that the holder makes a notional gain or can sell the new securities for a real gain.

Where the rules on convertible securities apply, income tax and

Access this article and thousands of others like it
free for 7 days with a trial of Tolley+™ Guidance.

TAKE A FREE TRIAL

Helen Wood

, Employment Tax

Popular Articles

Owner-Managed Businesses

Tax implications of administration and liquidation

Tax implications of administration and liquidationThis guidance considers the tax implications of a company going into administration or liquidation.Introduction to company administration and liquidationCompany going into administrationA company which is in financial difficulty may go into

14 Jul 2020 15:29 | Produced by Tolley Read more

Employment Tax

Long service awards

Long service awardsEmployee recognition by an employer can be an important motivational tool, as well as having a positive effect on retention. Most employer awards made to an employee are treated as taxable earnings under ITEPA 2003, s 62 or as a benefit under ITEPA 2003, s 201 because they are

14 Jul 2020 12:11 | Produced by Tolley Read more

Employment Tax

Loans written off

Loans written offCompanies sometimes provide directors, employees or shareholders with low interest or interest-free loans either as part of the reward package or on special occasions to help the individual meet significant expenditure. The employment income implications of these loans are discussed

14 Jul 2020 12:11 | Produced by Tolley Read more

��˾��ҹ��