The redesignation of deferred shares as ordinary shares amounted to a conversion under the employment related securities legislation, and the tribunal did not have jurisdiction to consider HMRC's refusal to apply a concessionary practice published in its manuals.
The appellant acquired deferred shares in January 2003. The company’s Articles of Association provided that deferred shares could be automatically redesignated as ordinary shares in certain circumstances. The appellant’s deferred shares were converted to ordinary shares in October 2005.
The appellant obtained legal advice that no income tax charge arose on the conversion or redesignation of his deferred shares as ordinary shares, because the deferred shares were not ‘convertible securities’ under the income tax legislation at the time of their issue in January 2003. This was on the basis that the conversion or redesignation of his deferred
