Restricted Securities ?

[simplytax]

Parent company sells all of shares in a subsidiary to existing directors of subsidiary. Price payable was lent to the directors under a loan agreement and a separate share pledge with the shares offered as security until the loan is repaid.

The shares acquired by the directors are Employment Related Securities but are they restricted securities?

The share pledge as security for the loan restricts the directors ability to sell the shares until the loan is repaid and the former Parent may take back beneficial ownership of the shares if there is a default on the loan. Does a charge over the shares to secure the borrowing actually reduce the value of the shares in such circumstances as if not the shares would not be regarded as "restricted securities" for ch 2 Part 7 ITEPA.

If the price paid for the shares was considered unrestricted market value then even if the shares were regarded as "restricted" the mechanics of any ch 2 charge calculation would not result in any actual charge as the initial uncharged proportion would be nil.

Any other basis on which the shares may not be regarded as restricted securities?