Ratchets and other geared arrangements


On 16th April 2003 Schedule 22 to Finance Bill 2003 was published detailing the replacement legislation affecting the taxation of employment-related securities and options.

Following discussions with the BVCA a joint memorandum of understanding (MOU – see ERSM30520) was published on 25th July 2003 on the Income Tax treatment of managers' equity investments in venture capital and private equity backed companies. This MOU was largely concerned with the effect of new Chapter 2 Part 7 ITEPA2003, but section 6, after addressing the tax treatment of ratchet arrangements for Chapter 2 purposes, went on to explain that, provided

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