Restricted securities

Employee sale to employee

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Employee has restricted shares (no s431 election made). Sells to another employee with same restrictions still in place, but actual value has increased. Is employee 2 another associated person for the purpose of s427(3)(c)? (So that we don't have to worry about the chargeable event formula at this point and employee 1 is simply assessed to CGT on the uplift in AMV.) Perhaps an academic question since even if we did have to calculate a charge using the formula I don't think there would be an income tax charge, assuming that IUP = OP in this case.

Related question - if an employee holds restricted shares and all restrictions are lifted, giving rise to income tax charge, I assume that on subsequent sale any further gain will be chargeable fully to CGT (the shares no longer being restricted so that s427(3)(c) cannot apply? Seems obvious, but I find the whole ERS regime very difficult to follow, so just checking.

 

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