Social Security Contributions (Share Options) Act 2001

a right to acquire shares in a body corporate was obtained by any person in the period beginning with 6th April 1999 and ending with 19th May 2000,

that right is one to which subsection (2) applies,

a notice in respect of that right is given in accordance with the following provisions of this section to the Inland Revenue before the end of the period of ninety-two days beginning with the day on which this Act is passed,

were a gain to be realised after the passing of this Act on the exercise, assignment or release of that right, the gain would or (if circumstances changed) might be one falling, by virtue of section 4(4)(a) of the Contributions and Benefits Act, to be treated for the purposes of that Act as remuneration derived from that person’s employment; or

a gain that has been realised after 7th November 2000 and before the passing of this Act on any exercise, assignment or release of that right has fallen, by virtue of section 4(4)(a) of that Act, to be so treated.

where neither of the following paragraphs apply, the person who would be the secondary contributor in relation to any liability to pay secondary Class 1 contributions in respect of a gain realised on an exercise, assignment or release, of that right on the day of the notice;

where an election for the purposes of paragraph 3B(1) of Schedule 1 to the Contributions and Benefits Act which is in force on the day of the notice would relate to the whole of any such gain—

where an election for the purposes of paragraph 3B(1) of that Schedule which is in force on the day of the notice would relate to only a part of any such gain, the persons mentioned in paragraph (b)(i) and (ii), acting jointly.

the person on whom (apart from this Act) the liability for secondary Class 1 contributions payable in respect of the gain mentioned in that paragraph did fall; and

if different parts of that liability fell (apart from this Act) on different persons, those persons acting jointly.

must be given in writing or by such electronic means as may be authorised by regulations made by the Inland Revenue;

must contain such matters and be in such form as may be required by any such regulations; and

once given, shall be irrevocable.

to have given such a notice in respect of that right in accordance with this section and immediately before the end of the period specified in subsection (1)(c);

to have accompanied that notice with a notification to the Inland Revenue that the liability arising by virtue of that notice was nil; and

to have given that notification in the belief that the facts reasonably ascertainable by him at the time at which he is deemed to have given it were grounds for giving it.

no liability to pay any Class 1 contributions in respect of any gain realised after the passing of this Act shall arise on the exercise, assignment or release of that right;

any liability to pay Class 1 contributions in respect of any gain realised after 7th November 2000 and before the passing of this Act on any exercise, assignment or release of that right shall be deemed never to have arisen; and

the person who gave the notice under that section in respect of that right shall become liable to pay a special contribution in respect of that right under this section.

12.2 per cent. of the amount (if any) in respect of which Class 1 contributions would have been payable by virtue of section 4(4)(a) of the Contributions and Benefits Act if the right had been exercised in full on 7th November 2000 without the giving of any further consideration for the shares acquired by the exercise of that right; or

where there is no such amount, nil.

the amount of any valuable consideration given for the assignment or release; and

the amount which (in accordance with the provisions of section 479 of the Income Tax (Earnings and Pensions) Act 2003) would have been taken to be the amount of the gain realised by an exercise in full of that right immediately before the time of its assignment or release (less any deductible amounts under section 480(1) to (6) of that Act).

a person becomes liable to pay to the Inland Revenue a special contribution under this section in respect of any right, but

that liability is not discharged before the end of the period of ninety-two days beginning with the day on which this Act is passed,

did, within the period of ninety-two days mentioned in that subsection, make a payment in respect of that liability to the Inland Revenue of an amount which he had reasonable grounds for believing was the correct amount of his liability,

did, within that period, give notification to the Inland Revenue, in the belief on reasonable grounds that it was correct, that the liability arising by virtue of that notice was nil, or

has a reasonable excuse for having failed to do either of those things within that period,

all such repayments shall be made as may be necessary by virtue of that paragraph; but

any amount which it would otherwise be necessary to repay in respect of a secondary Class 1 contribution paid by a person who has become liable to pay a special contribution under this section may be retained and set against any undischarged liability of his to pay that special contribution.

a right to acquire shares in a body corporate was obtained by any person in the period beginning with 6th April 1999 and ending with 19th May 2000 (“the original right”); and

the original right is or has been assigned or released (whether before or after the passing of this Act) for a consideration that consists of or includes another right (“the replacement right”) to acquire shares in that or any other body corporate.

as if (notwithstanding anything in section 483(1) to (4) of the Income Tax (Earnings and Pensions) Act 2003) the replacement right were or, as the case may be, were part of the valuable consideration given for the assignment or release; and

as if the value of so much of that consideration as is represented by the replacement right were equal to whichever is the smaller of the following amounts—

prevent a liability to pay Class 1 contributions from arising after the passing of this Act in respect of any gain realised on the exercise, assignment or release of the replacement right or of any subsequent replacement right, or

have the effect of deeming any such liability not to have arisen on any such gain,

as if that section had effect (or, as the case may be, had had effect) in relation to that right to the extent only that it is a right to acquire additional shares; and

as if the value of the consideration for the grant of the original right had been nil.

the whole or any part of any consideration given for the assignment or release of the replacement right or of any subsequent replacement right does not (or did not) comprise a subsequent replacement right, and

as a consequence, a gain would (but for this Act) be taken for the purposes of Chapter 5 of Part 7 of the Income Tax (Earnings and Pensions) Act 2003 to be realised (or to have been realised) on that assignment or release,

that (subject to paragraph (c)) the right assigned or released is a right the liability to pay Class 1 contributions in respect of which is a liability to which section 2(1)(a) or (b) applied;

that references in subsection (4) of this section to the original right and to the replacement right are references, respectively, to the right that is assigned or released and to the right comprised in the consideration for the assignment or release; and

that so much of the right assigned or released as is a right to acquire additional shares is to be disregarded for the purposes of both section 2(3) and subsection (4) of this section.

the amount which (in accordance with the provisions of section 479 of the Income Tax (Earnings and Pensions) Act 2003) would be taken to be the amount of the gain realised by an exercise of the new right at the relevant time (assuming it to be exercisable at that time) for obtaining the shares (less any deductible amounts under section 480(1) to (6)); and

the amount which would have been taken (in accordance with those provisions) to be the gain realised by a full exercise of the old right immediately before the time of its assignment or release;

all such repayments shall be made as may be necessary by virtue of that subsection; but

any amount which it would otherwise be necessary to repay in respect of a secondary Class 1 contribution paid by a person who has become liable to pay a special contribution under section 2 may be retained and set against any undischarged liability of his to pay that special contribution.

a notice is given in accordance with section 1 of this Act in respect of any right;

the person or one of the persons who gives that notice is a person who (apart from this Act) was liable, or would have become liable, by virtue of an election under paragraph 3B(1) of Schedule 1 to the Contributions and Benefits Act, to pay secondary Class 1 contributions in respect of any gain arising on the exercise, assignment or release of that right; and

that person (“the earner”) becomes liable to pay a special contribution under section 2 of this Act in respect of that right.

as if the election mentioned in subsection (1)(b) of this section were in force, with the effect mentioned in subsection (1)(b) of that section, at any time when the earner becomes or became chargeable to tax on a gain realised on the exercise, assignment or release of the right, and

as if the reference in subsection (2)(b) of that section to any liability that has become the earner’s by virtue of that election included any liability of his, in consequence of the giving of the notice under section 1 of this Act, to pay a special contribution under section 2 of this Act.

a reference to shares in a body corporate includes a reference to stock in that body corporate and to securities issued by that body corporate;

a reference to the release of a right includes a reference to agreeing to a restriction of the exercise of the right; and

references to the assignment or release of a right to acquire shares, and to gains realised on such an assignment or release, shall be construed as if section 477(6) of the Income Tax (Earnings and Pensions) Act 2003 applied for the purposes of this Act as it applies for the purposes of Chapter 5 of Part 7 of that Act.

as a contribution of a class provided for by the Contributions and Benefits Act; and

as due at the end of the period of ninety-two days beginning with the day on which this Act is passed;