Restricted securities in the UK: ITEPA 2003 definition, valuation, specified restrictions, the UBS/DB commercial purpose test, HMRC approach to listed-company black-out periods, and statutory exclusions
Published by a
LexisNexis Share Incentives expert
Practice notes
The provisions governing directors and employees for restricted securities set out in Chapter 2, Part 7 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003) are very commonly encountered in day-to-day practice on corporate transactions involving management. In broad terms, restricted securities are employment-related securities which:
- at the time of acquisition
- are subject to recognisable restrictions
- that depress the market value of the securities
Such restrictions are typically intended to incentivise an employee to remain with the employing company and to meet certain performance conditions. Either the securities themselves can be restricted (i.e. restricted securities) or the restriction can apply to the employee’s interest in those securities (a restricted interest in securities). The restrictions may affect an employee’s ability to retain the shares (for example, the articles of association may require an employee to transfer shares at the company’s direction upon the occurrence of specified events, such as the employee’s resignation), or they may affect the general rights attaching to the shares (for example, limitations on transfer, dividend rights or voting rights). Generally, any restriction that reduces the market value of the security will be sufficient for these purposes, however the legislation continues beyond this extract and remains...
To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.
Web page updated on 21/05/2026
Popular documents
When evaluating a general damages claim, the practitioner ought initially to refer to the Judicial College Guidelines (JCG)...
This Practice Note This Practice Note reviews mechanisms used in settling litigation. A Tomlin order consists of a consent order paired with a schedule. It operates to stay proceedings on terms that have been agreed. The provisions contained in the schedule may remain confidential. This Practice Note describes the scope of confidentiality attaching to the schedule and sets out how it differs from a standard consent order. Sample wording for a Tomlin order is included, alongside links to precedents, as well as guidance on court approval. It also addresses varying, setting aside and enforcing a Tomlin order, including the considerations the court will take into account when handling applications for each. Further guidance is provided on interpreting and applying the relevant provisions of the CPR; however, some courts and divisions impose very specific requirements for both drafting and approval, and for approaching the schedule and confidentiality issues. Accordingly, you must consider the particular rules and court guide provisions in the forum where your claim is proceeding when drawing up the Tomlin order...
Date [ date ] Parties [ name of Landlord ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Landlord) [ name of Tenant ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Tenant) [ [ name of Guarantor ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Guarantor) ] [ [ name of Mortgagee ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Mortgagee) ] Definitions Within this Deed, the terms below shall be interpreted as follows: [ Annual Rent • the annual sum reserved under the Lease; ] [ Insurance Rent • the Tenant’s share of the Landlord’s costs of insuring the Property (as set out in the Lease); ] Lease • the lease of the Property dated [ date ], entered into between (1) [ the Landlord OR [ name ...
I, [ name ], of [ address ], solemnly and sincerely state that: [ Matters to be verified, set out in numbered paragraphs ] I make this solemn statement in good conscience, believing it to be true, and pursuant to the provisions of the Statutory Declarations Act 1835. DECLARED at [ details ] this [ day ] day of [ month and year ] Before me ................................................................................ [ signature of the person before whom the declaration is made ] A [ commissioner for oaths OR [ solicitor OR [ insert other qualification ] ] authorised to administer oaths ]...
Discover more from LexisNexis
