There are specific rules in Part 7 Chapter 3 ITEPA 2003 concerning convertible shares. The rules determine when a tax charge arises and the amount that counts as employment income of an employee in respect of convertible shares (see Share Schemes Manual, SSM4.13).
These rules were amended by Schedule 22 FA 2003 with effect from 1 September 2003. The guidance below relates to any event occurring before 1 September 2003 that gives rise to acharge to tax under the original legislation at Part 7 Chapter 3 ITEPA 2003. For any event occurring on or after 1 September 2003 that gives rise to a charge under the substituted legislation at Part 7 Chapter 3 see EIM12230.