Commentary Section 1: Notices relating to share options acquired before 19 May 2000
7.Subsection (1) defines the share option gains to which the provisions may relate. These are options granted during the period beginning on 6 April 1999 and ending on 19 May 2000, and exercised, assigned or released after 7 November 2000. The options must fall within the provisions of subsection (2) and a notice of entitlement to use these provisions must be lodged with the Inland Revenue within 92 days of the enactment of this legislation. Where such notification is made, the National Insurance liabilities on gains arising is to be determined in accordance with section 2.
8.Subsection (2) defines the options as those where the gain has or would be treated under section 4(4)(a) of the Social Security Contributions and Benefits Act 1992 (CBA) as remuneration from employment.
9.Subsection (3) specifies who is to provide the notice required by subsection (1) where the share option gain arises after the passing of this Act. Where an election to transfer the liability from the secondary contributor – normally the employer - to the employee is in force in respect of the whole of the liability, the notice can be given by either the company or the employee. Where an election is in force to cover only a part of the liability, the notice must be lodged jointly by the employee and the employer. Where no election is in force, the notice is to be lodged by the employer.
10.Subsection (4) specifies who is to lodge the notice in the case of gains realised after 7 November 2000 and before the passing of this Act. In these cases the notice is to be given by the person responsible for the secondary NI contribution, and, if the liability falls on more than one person, those people acting jointly.
11.Subsection (5) provides that the notice is to be given in writing or electronically in the form laid down by the Revenue, and once given is to be irrevocable.
12.Subsection (6) deems a notification to have been validly given where liability to the special contribution under section 2 would be nil.