If shares are issued by an employer company to an employee for less than market value, then it is pretty clear - in both the legislation and HMRC guidance - that a charge under ITEPA 2003 s.62 arises. However, the position is less clear when the employee acquires shares from another shareholder at less than MV. None of the exceptions (family etc) apply so the shares will be employment-related. However, it seems to me that they have not been acquired "from" the employment, such that s.62 is not in point and the notional loan charge should instead apply (but with no immediate charge since the exclusion for acquisition of shares in a close company). Do others agree, or disagree?
In response to the first comment below, it is not my "rule" but seemingly HMRC's interpretation:
"The acquisition of securities may not be chargeable as ‘earnings’- the charge as earnings is on earnings from the employment. The test for the application of Part 7 is that securities are acquired ‘by reason of employment’. ... In the unusual circumstances where securities do not constitue earnings from the employment but are acquired by reason of employment the charge will be under Chapter 3C."
On the one hand, that would appear to confirm my thinking. On the other, the transfer of shares between shareholders is not particularly unusual, which leaves me wondering if HMRC consider such a transfer to remain subject to s.62. (Then again, it is probably fair to say that a transfer between unconnected individuals at undervalue is relatively unusual.)