SCHEDULE TO BE INSERTED AS SCHEDULE 1ZB IN THE PRINCIPAL REGULATIONS
CALCULATION OF EARNINGS FOR THE PURPOSES OF EARNINGS-RELATED CONTRIBUTIONS IN PARTICULAR CASES
Calculation of earnings
This Schedule contains rules for the calculation of earnings in the assessment of earnings-related contributions in particular cases.
In this Schedule—
“the Taxes Act” means the Income and Corporation Taxes Act 1988;
“Schedule 1ZC” means Schedule 1ZC to these Regulations; and
“Schedule E” means the Schedule referred to as Schedule E in the Taxes Act.
In this Schedule unless the context otherwise requires—
a reference to a numbered paragraph, is a reference to the paragraph in this Schedule bearing that number;
a reference in a paragraph to a numbered sub-paragraph is a reference to the sub-paragraph of that paragraph bearing that number;
a reference in a sub-paragraph to a lettered paragraph is a reference to the paragraph of that sub-paragraph bearing that letter; and
a reference in a lettered paragraph to a numbered head is a reference to the head in that lettered paragraph bearing that number.
Calculation of earnings in respect of beneficial interest in assets within Part IV of Schedule 1ZC
Except where paragraph 3, 4, 5 or 6 applies, the amount of earnings comprised in any payment by way of the conferment of any beneficial interest in any asset specified in Part IV of Schedule 1ZC, and which falls to be taken into account in the calculation of a person’s earnings shall be calculated or estimated at a price which that beneficial interest might reasonably be expected to fetch if sold in the open market on the day on which it is conferred.
For the purposes of sub-paragraph (1), where any asset is not quoted on a recognised stock exchange within the meaning of section 841 of the Taxes Act, it shall be assumed that, in the open market which is postulated, there is available to any prospective purchaser of the beneficial interest in the asset in question all the information which a prudent prospective purchaser might reasonably require if he were proposing to purchase it from a willing vendor by private treaty and at arm’s length.
Valuation of beneficial interest in units in a unit trust scheme
The amount of earnings which is comprised in any payment by way of the conferment of a beneficial interest in any units in a unit trust scheme (within the meaning of section 75(8) of the Financial Services Act 198614) having a published selling price and which falls to be taken into account in the calculation of a person’s earnings shall be calculated or estimated by reference to the published selling price on the day in question.
Here “published selling price” means the lowest selling price published on the date on which the payment in question is made, and where no such price is published on that date, it means the lowest selling price published on the last previous date on which such a price was published.
Conferment of a beneficial interest in an option to acquire an asset falling within Part IV of Schedule 1ZC
The amount of earnings which is comprised in a payment by way of the conferment of a beneficial interest in an option to acquire any asset falling within Part IV of Schedule 1ZC shall be calculated or estimated by reference to the amount which would be comprised in accordance with paragraph 2, or, if paragraph 3, 5 or 6 would apply in accordance with that paragraph, in a payment by way of the conferment of a beneficial interest—
in the asset which may be acquired by the exercise of the option; or