|
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(4) In the case of an award of partnership shares where the plan does provide | |
for an accumulation period, the qualifying period must be a period of not | |
more than 6 months ending with the start of the accumulation period | |
relating to the award. | |
(5) In the case of an award of matching shares where the plan does not provide | 5 |
for an accumulation period, the qualifying period must be a period of not | |
more than 18 months ending with the deduction of partnership share money | |
relating to the award of partnership shares to which the matching shares | |
relate. | |
(6) In the case of an award of matching shares where the plan does provide for | 10 |
an accumulation period, the qualifying period must be a period of not more | |
than 6 months ending with the start of the accumulation period relating to | |
the award of partnership shares to which the matching shares relate. | |
(7) In relation to an award, the same qualifying period must apply in relation to | |
all employees— | 15 |
(a) of the company, or | |
(b) in the case of a group plan, of the constituent companies. | |
(8) The plan may authorise the company to specify different qualifying periods | |
in respect of different awards of shares, but the requirements in sub- | |
paragraphs (2) to (7) apply to periods so specified. | 20 |
Meaning of “qualifying company” | |
17 (1) For the purposes of paragraph 15(2) “qualifying company” has the meaning | |
given by this paragraph. | |
(2) Except in the case of a group plan, “qualifying company” means— | |
(a) the company, or | 25 |
(b) a company that, when the individual was employed by it, was an | |
associated company— | |
(i) of the company, or | |
(ii) of another company qualifying under this paragraph. | |
(3) In the case of a group plan, “qualifying company” means— | 30 |
(a) a company that is a constituent company at the end of the qualifying | |
period mentioned in paragraph 15(2), | |
(b) a company that, when the individual was employed by it, was a | |
constituent company, or | |
(c) a company that, when the individual was employed by it, was an | 35 |
associated company of— | |
(i) a company qualifying under paragraph (a) or (b), or | |
(ii) another company qualifying under this paragraph. | |
Requirement not to participate in other SIPs | |
18 (1) The plan must provide that an individual is not eligible to participate in an | 40 |
award of free, matching or partnership shares under the plan in a tax year if | |
the individual— | |
(a) has in that year already participated, or | |
(b) is at the same time to participate, | |
| |
| |
|
| |
| |
in an award of shares under another approved SIP established by the | |
company or a connected company. | |
(2) For the purposes of this paragraph an individual is to be treated as having | |
participated in an award of free shares under a SIP if the individual would | |
have participated in that award but for the individual’s failure to obtain a | 5 |
performance allowance (see paragraph 34). | |
(3) In this paragraph “connected company” means— | |
(a) a company which controls or is controlled by the company or which | |
is controlled by a company which also controls the company, or | |
(b) a company which is a member of a consortium owning the company | 10 |
or which is owned in part by the company as a member of a | |
consortium. | |
The “no material interest” requirement | |
19 (1) The plan must provide that an individual is not eligible to participate in an | |
award of shares on any date if the individual has on that date, or has had | 15 |
within the 12 months ending with that date, a material interest in— | |
(a) a close company whose shares may be awarded under the plan, or | |
(b) a company which has control of such a company or is a member of a | |
consortium which owns such a company. | |
(2) For the purposes of this paragraph an individual is to be regarded as having | 20 |
a material interest in a company if— | |
(a) the individual, | |
(b) the individual together with one or more of the individual’s | |
associates, or | |
(c) any such associate, with or without any other such associates, | 25 |
has a material interest in the company. | |
(3) This paragraph is supplemented— | |
(a) as regards the meaning of “material interest”, by paragraphs 20 and | |
21, and | |
(b) as regards the meaning of “associate”, by paragraphs 22 to 24. | 30 |
Meaning of “material interest” | |
20 (1) In paragraph 19 (the “no material interest” requirement) references to a | |
“material interest” in a company are to— | |
(a) a material interest in the share capital of the company, or | |
(b) where it is a close company, a material interest in its assets. | 35 |
(2) A material interest in the share capital of a company means— | |
(a) beneficial ownership of, or | |
(b) the ability to control (directly or through the medium of other | |
companies or by any other indirect means), | |
more than 25% of the ordinary share capital of the company. | 40 |
(3) A material interest in the assets of a close company means— | |
(a) possession of, or | |
(b) an entitlement to acquire, | |
| |
| |
|
| |
| |
such rights as would, in the event of the winding up of the company or in | |
any other circumstances, give an entitlement to receive more than 25% of the | |
assets that would then be available for distribution among the participators. | |
(4) In this paragraph— | |
“close company” includes a company that would be a close company | 5 |
but for— | |
(a) section 414(1)(a) of ICTA (exclusion of companies not | |
resident in the United Kingdom), or | |
(b) section 415 of ICTA (exclusion of certain quoted | |
companies), and | 10 |
“participator” has the meaning given by section 417(1) of ICTA. | |
(5) This paragraph is supplemented by paragraph 21 (material interest: options | |
and interests in SIPs). | |
Material interest: options and interests in SIPs | |
21 (1) This paragraph applies for the purposes of paragraph 20 (meaning of | 15 |
“material interest”). | |
(2) A right to acquire shares (however arising) is to be treated as a right to | |
control them. | |
(3) Sub-paragraph (4) applies in a case where— | |
(a) the shares to be attributed to an individual consist of or include | 20 |
shares which the individual or another person has a right to acquire, | |
and | |
(b) the circumstances are such that, if that right were to be exercised, the | |
shares acquired would be shares which were previously unissued | |
and which the company would be contractually bound to issue in the | 25 |
event of the exercise of the right. | |
(4) In determining at any time prior to the exercise of the right whether the | |
number of shares to be attributed to the individual exceeds 25% of the | |
ordinary share capital of the company, that ordinary share capital is to be | |
treated as increased by the number of unissued shares referred to in sub- | 30 |
paragraph (3)(b). | |
(5) The references in sub-paragraphs (3) and (4) to the shares to be attributed to | |
an individual are to the shares which— | |
(a) for the purposes of paragraph 20(2) (material interest in share | |
capital), and | 35 |
(b) in accordance with paragraph 19(2) (material interest can consist of | |
or include that of the individual’s associates), | |
fall to be brought into account in the individual’s case so that it can be | |
determined whether their number exceeds 25% of the company’s ordinary | |
share capital. | 40 |
(6) In applying paragraph 20 the following are to be disregarded— | |
(a) the interest of the trustees of any approved SIP in any shares which | |
are held by them in accordance with the plan but which have not | |
been appropriated to, or acquired on behalf of, an individual, and | |
(b) any rights exercisable by the trustees as a result of that interest. | 45 |
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Meaning of “associate” | |
22 (1) In paragraph 19(2) (the “no material interest” requirement) “associate”, in | |
relation to an individual, means— | |
(a) any relative or partner of the individual, | |
(b) the trustee or trustees of any settlement in relation to which the | 5 |
individual, or any of the individual’s relatives (living or dead), is or | |
was a settlor, and | |
(c) where the individual is interested in any shares or obligations of the | |
company mentioned in paragraph 19(2) which are subject to any | |
trust, or are part of the estate of a deceased person— | 10 |
(i) the trustee or trustees of the settlement concerned, or | |
(ii) the personal representatives of the deceased, | |
as the case may be. | |
(2) Sub-paragraph (1)(c) needs to be read with paragraphs 23 and 24 (which | |
relate to employee benefit trusts and discretionary trusts). | 15 |
(3) In this paragraph— | |
“relative” means— | |
(a) spouse, | |
(b) parent, child or remoter relation in the direct line, or | |
(c) brother or sister; | 20 |
“settlor” and “settlement” have the same meaning as in Chapter 1A of | |
Part 15 of ICTA (see section 660G(1) and (2)). | |
Meaning of “associate”: trustees of employee benefit trust | |
23 (1) This paragraph applies for the purposes of paragraph 22(1)(c) (meaning of | |
“associate”: trustees of settlement) where an individual is interested as a | 25 |
beneficiary of an employee benefit trust in shares or obligations of the | |
company mentioned in paragraph 19(2). | |
(2) The trustees of the employee benefit trust are not to be regarded as associates | |
of the individual as a result only of the individual’s being so interested if | |
neither— | 30 |
(a) the individual, nor | |
(b) the individual together with one or more of the individual’s | |
associates, nor | |
(c) any such associate, with or without any other such associates, | |
has at any time after 13th March 1989 been the beneficial owner of, or able | 35 |
(directly or through the medium of other companies or by any other indirect | |
means) to control, more than 25% of the ordinary share capital of the | |
company. | |
(3) In sub-paragraph (2)(b) and (c) “associate” has the meaning given by | |
paragraph 22(1), but does not include the trustees of an employee benefit | 40 |
trust as a result only of the individual’s having an interest in shares or | |
obligations of the trust. | |
(4) Chapter 11 of Part 7 of this Act (which deals with the attribution of interests | |
in companies to beneficiaries of employee benefit trusts) applies for the | |
purposes of sub-paragraph (2). | 45 |
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| |
(5) In this paragraph “employee benefit trust” has the same meaning as in that | |
Chapter (see sections 550 and 551). | |
Meaning of “associate”: trustees of discretionary trust | |
24 (1) This paragraph applies for the purposes of paragraph 22(1)(c) (meaning of | |
“associate”: trustees of settlement) where— | 5 |
(a) the individual (“the beneficiary”) is one of the objects of a | |
discretionary trust, | |
(b) the property subject to the trust has at any time consisted of, or | |
included, shares or obligations of the company mentioned in | |
paragraph 19(2), | 10 |
(c) the beneficiary has ceased to be eligible to benefit under the trust as | |
a result of— | |
(i) an irrevocable disclaimer or release executed by the | |
beneficiary, or | |
(ii) the irrevocable exercise by the trustees of a power to exclude | 15 |
the beneficiary from the objects of the trust, | |
(d) immediately after the beneficiary ceased to be so eligible, no | |
associate of the beneficiary was interested in the shares or | |
obligations of the company which were subject to the trust, and | |
(e) during the period of 12 months ending with the date on which the | 20 |
beneficiary ceased to be so eligible, neither the beneficiary nor any | |
associate of the beneficiary received any benefit under the trust. | |
(2) The beneficiary is not, as a result only of the matters mentioned in sub- | |
paragraph (1)(a) and (b), to be regarded as having been interested in the | |
shares or obligations of the company at any time during that period of 12 | 25 |
months. | |
(3) In sub-paragraph (1) “associate” has the meaning given by paragraph 22(1), | |
but with the omission of paragraph (c) (trusts and estates). | |
Part 4 | |
Types of shares that may be awarded | 30 |
Types of share that may be awarded: introduction | |
25 (1) The requirements of the following paragraphs must be met with respect to | |
any shares that may be awarded under a SIP— | |
paragraph 26 (shares must be part of ordinary share capital of certain | |
companies), | 35 |
paragraph 27 (requirement as to listing etc.), | |
paragraph 28 (shares must be fully paid up and not redeemable), | |
paragraph 29 (prohibited shares), and | |
paragraph 30 (only certain kinds of restriction allowed). | |
(2) In this Part of this Schedule “eligible shares” means shares that may be | 40 |
awarded under the plan. | |
Shares must be part of ordinary share capital of certain companies | |
26 Eligible shares must form part of the ordinary share capital of— | |
| |
| |
|
| |
| |
(a) the company, | |
(b) a company which has control of the company, or | |
(c) a company which either is, or has control of, a company which is a | |
member of a consortium owning either the company or a company | |
having control of the company. | 5 |
Requirement as to listing etc. | |
27 (1) Eligible shares must be— | |
(a) shares of a class listed on a recognised stock exchange, | |
(b) shares in a company which is not under the control of another | |
company, or | 10 |
(c) shares in a company which is under the control of a listed company. | |
(2) A “listed company” is a company whose shares are listed on a recognised | |
stock exchange, other than— | |
(a) a close company, or | |
(b) a company that would be a close company if resident in the United | 15 |
Kingdom. | |
Shares must be fully paid up and not redeemable | |
28 (1) Eligible shares must be— | |
(a) fully paid up, and | |
(b) not redeemable | 20 |
(2) For the purposes of sub-paragraph (1)(a) shares are not to be regarded as | |
fully paid up if there is an undertaking to pay cash at a future date to the | |
company whose shares they are. | |
(3) For the purposes of sub-paragraph (1)(b) “redeemable” shares include | |
shares that may become redeemable at a future date. | 25 |
(4) Sub-paragraph (1)(b) does not apply to shares in a registered industrial and | |
provident society which is a co-operative society. | |
(5) In sub-paragraph (4)— | |
“registered industrial and provident society” means a society | |
registered or deemed to be registered under the Industrial and | 30 |
Provident Societies Act 1965 (c. 12) or the Industrial and Provident | |
Societies Act (Northern Ireland) 1969 (c. 24 (N.I.)), and | |
“co-operative society” has the same meaning as in section 1 of the 1965 | |
Act or, as the case may be, the 1969 Act. | |
Prohibited shares | 35 |
29 (1) Eligible shares must not be shares in— | |
(a) a service company, or | |
(b) a company that— | |
(i) has control of a service company, and | |
(ii) is under the control of a person or persons who fall within | 40 |
sub-paragraph (2)(b)(i) or (ii) as it applies to a service | |
company. | |
(2) For the purposes of this paragraph a company is a “service company” if— | |
| |
| |
|
| |
| |
(a) the business carried on by it consists substantially in the provision of | |
the services of persons employed by it, and | |
(b) the majority of those services are provided to— | |
(i) a person who has control of the company, | |
(ii) two or more persons who together have control of the | 5 |
company, or | |
(iii) a company associated with the company. | |
(3) For the purposes of sub-paragraph (2)(b)(iii) a company is associated with | |
another company if both companies are under the control of the same person | |
or persons. | 10 |
(4) For the purposes of sub-paragraphs (1) to (3)— | |
(a) a partnership is to be treated as a single person; and | |
(b) where a partner (alone or together with others) has control of a | |
company, the partnership is to be treated as having (in the same way) | |
control of that company. | 15 |
(5) For the purposes of this paragraph the question whether a person controls a | |
company is to be determined in accordance with section 416(2) to (6) of | |
ICTA. | |
Only certain kinds of restriction allowed | |
30 (1) Eligible shares must not be subject to any restrictions other than— | 20 |
(a) those affecting all ordinary shares in the company, | |
(b) those permitted by— | |
(i) paragraph 31 (voting rights), | |
(ii) paragraph 32 (provision for forfeiture), or | |
(iii) paragraph 33 (pre-emption conditions), or | 25 |
(c) those involved in there being a holding period (see paragraphs 36, 61 | |
and 67). | |
(2) For the purposes of this paragraph shares are subject to a restriction if there | |
is any contract, agreement, arrangement or condition— | |
(a) by which a person’s freedom to dispose of the shares or of any | 30 |
interest in them or of the proceeds of their sale or to exercise any right | |
conferred by them is restricted, or | |
(b) by which such a disposal or exercise may result in any disadvantage | |
to the person or to a person connected with the person. | |
This is subject to sub-paragraphs (3) and (4). | 35 |
(3) Sub-paragraph (2) does not extend to so much of any contract, agreement, | |
arrangement or condition as contains provisions similar in purpose and | |
effect to any of the provisions of the Model Code as (for the time being) set | |
out in the listing rules issued by the competent authority for listing in the | |
United Kingdom under section 74(4) of the Financial Services and Markets | 40 |
Act 2000 (c. 8). | |
(4) Any discretion of the directors under the articles of association of the | |
company to refuse to accept the transfer of shares is to be disregarded for the | |
purposes of this paragraph if the directors— | |
(a) have undertaken to the Inland Revenue not to exercise it in such a | 45 |
way as to discriminate against participants, and | |
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