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51 (1) This paragraph relates to the operation of section 439 (amount of charge on | |
conversion of shares) in relation to an acquisition made before 6th April | |
2003. | |
(2) For the purposes of section 439(1) each of the following is a “deductible | |
amount”— | 5 |
(a) any amounts on which the employee has become chargeable to tax | |
under Schedule E in respect of the acquisition of the convertible | |
shares or the interest in them; | |
(b) if the convertible shares, or an interest in them, were acquired | |
through a series of conversions each of which was a pre- | 10 |
commencement taxable conversion, the amount of the gain under | |
section 140D(5) of ICTA from each conversion, so far as not falling | |
within paragraph (a); and | |
(c) any amount on which the employee has become chargeable to tax in | |
respect of the shares under section 78 or 79 of FA 1988 (unapproved | 15 |
employee share schemes) by reference to an event that occurred | |
before 6th April 2003. | |
(3) In sub-paragraph (2)(b) a “pre-commencement taxable conversion” means a | |
conversion which— | |
(a) gave rise to a gain on which the employee was chargeable to tax by | 20 |
virtue of section 140D of ICTA, or | |
(b) would have done so but for the fact that the market value of the | |
shares at the time of the conversion did not exceed the sum of the | |
deductible amounts. | |
52 (1) This paragraph relates to the operation of section 439 (amount of charge on | 25 |
conversion of shares) in relation to an acquisition made on or after 6th April | |
2003 through a series of conversions, one or more of which occurred before | |
that date and each of which was a pre-commencement taxable conversion or | |
a taxable conversion. | |
(2) In this paragraph— | 30 |
“pre-commencement taxable conversion” has the meaning given by | |
paragraph 51(3), and | |
“taxable conversion” has the meaning given by clause 439(6). | |
(3) For the purposes of section 439(1) each of the following is a “deductible | |
amount”— | 35 |
(a) the amount of the gain under section 140D(5) of ICTA from each pre- | |
commencement taxable conversion; and | |
(b) the taxable amount for each taxable conversion, so far as not falling | |
within paragraph (c), (d) or (e) of section 439(2). | |
53 (1) This paragraph applies where— | 40 |
(a) a person provided an individual with convertible shares, or an | |
interest in such shares, in a company, | |
(b) those shares were converted in the tax year 2002-03 into shares of a | |
different class, and | |
(c) the circumstances were such that the conversion gave rise, or might | 45 |
have given rise, to a charge under section 140D of ICTA (convertible | |
shares) on the individual. | |
(2) Section 445 (duty to notify on conversions of shares) applies in relation to the | |
conversion subject to the following provisions. | |
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(3) The particulars required by section 445(2) must be provided to the Inland | |
Revenue before 6th May 2003. | |
(4) However, no particulars of the provision need be provided by a person | |
under section 445 if that person has already given particulars of it under | |
section 140G(3) of ICTA (which made provision corresponding to section | 5 |
445 for tax years before 2003-04). | |
Post-acquisition benefits from shares | |
54 Chapter 4 of Part 7 does not apply in relation to shares or an interest in | |
shares acquired before 26th October 1987, except to the extent provided by | |
paragraph 55 (read with paragraph 56). | 10 |
55 (1) Chapter 4 of Part 7 applies in relation to shares or an interest in shares | |
acquired before 26th October 1987 if the company was not a dependent | |
subsidiary on that date. | |
(2) But it so applies— | |
(a) with the omission of sections 453 to 460, and | 15 |
(b) subject to paragraph 56. | |
56 The removal or variation of a restriction applying to shares or an interest in | |
shares acquired before 26th October 1987 is not a chargeable event for the | |
purposes of section 449 if paragraph 7 of Schedule 8 to FA 1973 (requirement | |
for disposal to nominees at price not exceeding market value on termination | 20 |
of employment) would have applied to it. | |
57 Despite the repeals made by this Act— | |
(a) sections 138 and 139 of ICTA (share acquisitions by directors and | |
employees), and | |
(b) section 140 of ICTA (further interpretation) as it applies for the | 25 |
purposes of those sections, | |
continue to apply in relation to shares or interests in shares acquired before | |
26th October 1987. | |
58 (1) This paragraph relates to the operation of section 448 (cases where Chapter | |
4 of Part 7 does not apply). | 30 |
(2) Section 448(1) applies in relation to any acquisition made before 6th April | |
2003 with the substitution of “if the person was not chargeable under Case I | |
of Schedule E in respect of the office or employment in question” for the | |
words “if the earnings” onwards. | |
(3) Section 448(3) and (4) do not apply in relation to any acquisition made before | 35 |
16th January 1991. | |
59 (1) This paragraph relates to the operation of section 455 (amount of charge on | |
increase in value of shares) in relation to an acquisition made before 6th | |
April 2003. | |
(2) If before that date an event occurred by virtue of which the employee | 40 |
became chargeable to tax under— | |
(a) section 140A(4) of ICTA (employee’s interest in shares ceasing to be | |
only conditional), or | |
(b) section 140D(3) of ICTA (charge on conversion of convertible shares), | |
on any amount in respect of the shares, that amount is a “deductible | 45 |
amount” for the purposes of section 455(1). | |
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60 (1) This paragraph applies where any acquisition of shares or an interest in | |
shares within section 465(1) (general duty to notify acquisitions of shares or | |
interests in shares) was made in the tax year 2002-03. | |
(2) Section 465 applies in relation to the acquisition subject to the following | |
provisions. | 5 |
(3) The particulars of the acquisition required by section 465(3) must be | |
provided to the Inland Revenue before 7th July 2003. | |
(4) However, no particulars of the acquisition need be provided by a company | |
under section 465 if the company has already given particulars of it under— | |
(a) section 85(1) of FA 1988 (which made provision corresponding to | 10 |
section 465 for tax years before 2003-04), | |
(b) section 136(6) of ICTA (which made provision corresponding to | |
section 486 for such tax years), or | |
(c) section 140G(1) of ICTA (which made provision corresponding to | |
section 432 for such tax years). | 15 |
61 (1) This paragraph applies where after 4th February but before 6th April 2003— | |
(a) a chargeable event (within the meaning given by section 450) | |
occurred in relation to shares in a company, or | |
(b) a person received a chargeable benefit (within the meaning given by | |
section 458) in respect of shares, or an interest in shares, in a | 20 |
company. | |
(2) Section 466 (duty to notify chargeable events and chargeable benefits) | |
applies in relation to the event or benefit subject to the following provisions. | |
(3) The particulars required by section 466(3) must be provided to the Inland | |
Revenue within 60 days after the date on which the event occurred or the | 25 |
benefit was received. | |
(4) However, no particulars of the event or benefit need be provided by a | |
company under section 466 if the company has already given particulars of | |
it under section 85(2) of FA 1988 (which made provision corresponding to | |
section 466 for tax years before 2003-04). | 30 |
Share options | |
62 The following provisions have effect in relation to rights obtained before 6th | |
April 1998 with the substitution of “seventh anniversary” for “tenth | |
anniversary”— | |
(a) section 474(1) (no charge in respect of receipt of shorter-term option), | 35 |
and | |
(b) section 475(1) (value of longer-term option for purposes of liability to | |
tax in respect of receipt). | |
63 (1) This paragraph relates to the operation of section 473 (share options to which | |
Chapter 5 of Part 7 does not apply). | 40 |
(2) Section 473(1) applies in relation to a share option granted before 6th April | |
2003 with the substitution of “if the person was not chargeable under Case 1 | |
of Schedule E in respect of the office or employment” for the words from “if | |
the earnings” onwards. | |
64 (1) This paragraph relates to the operation of section 478 (amount of charges) in | 45 |
relation to a share option obtained before 6th April 2003. | |
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(2) For the purposes of section 478(1), any amount charged to tax under | |
Schedule E in respect of the receipt of the share option is a deductible | |
amount. | |
65 (1) This paragraph relates to the operation of section 479 (amount of gain | |
realised by exercising option) in relation to a share option obtained before | 5 |
6th April 2003. | |
(2) For the purposes of section 479(1), if an amount was chargeable to tax under | |
section 185(6) of ICTA (charge where option under approved share option | |
scheme granted at a discount) in respect of the share option, so much of that | |
amount as is attributable to the shares in question is a deductible cost. | 10 |
66 (1) This paragraph relates to the operation of section 480 (amount of gain | |
realised by assigning or releasing option) in relation to a share option | |
obtained before 6th April 2003. | |
(2) For the purposes of section 480(1), if an amount was chargeable to tax under | |
section 185(6) of ICTA (charge where option under approved share option | 15 |
scheme granted at a discount) in respect of the share option, so much of that | |
amount as is attributable to the shares in question is a deductible cost. | |
67 (1) This paragraph applies where in the tax year 2002-03 a company— | |
(a) granted a share option in respect of which tax might have become | |
chargeable under section 135 of ICTA, | 20 |
(b) allotted or transferred shares on the exercise of such a share option, | |
(c) received notice of the assignment of such a share option, or | |
(d) provided a benefit in money or money’s worth— | |
(i) for the assignment of such a share option, | |
(ii) for the release in whole or in part of such a share option, | 25 |
(iii) for or in connection with a failure, or undertaking not, to | |
exercise such a share option, or | |
(iv) for or in connection with the grant of, or an undertaking to | |
grant, a right to acquire shares or an interest in shares to | |
which such a share option relates. | 30 |
(2) Section 486 (duty to notify matters relating to share options) applies in | |
relation to the matter subject to the following provisions. | |
(3) The particulars required by section 486(2) must be provided to the Inland | |
Revenue before 7th July 2003. | |
(4) However, no particulars of the provision need be provided by a company | 35 |
under section 486 if the company has already given particulars of it under— | |
(a) section 136(6) of ICTA (which made provision corresponding to | |
section 486 for tax years before 2003-04), or | |
(b) paragraph 2 of Schedule 14 to FA 2000 (which made provision | |
corresponding to paragraph 44 of Schedule 5 for tax years before | 40 |
2003-04). | |
Approved share incentive plans | |
68 (1) This paragraph applies where, immediately before 6th April 2003, an | |
employee share ownership plan was approved under Schedule 8 to FA 2000 | |
(employee share ownership plans). | 45 |
(2) On and after that date the plan is to be treated as a share incentive plan (or | |
“SIP”) approved by the Inland Revenue under Schedule 2 to this Act. | |
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(3) Sub-paragraph (2) has effect even if the provisions of the plan do not wholly | |
conform with the provisions of Schedule 2 to this Act, but it has effect | |
without prejudice to— | |
(a) paragraphs 83 and 84 of that Schedule (withdrawal of approval), | |
(b) paragraphs 89 and 90 of that Schedule (termination of plan), and | 5 |
(c) any alteration of the plan. | |
(4) For the purposes of paragraph 84(1)(a) of Schedule 2, as it applies to the plan, | |
nothing is to be regarded as a disqualifying event because of a contravention | |
of any of the requirements of that Schedule if the requirement in question | |
does not correspond to any of the requirements of Schedule 8 to FA 2000. | 10 |
(5) Nothing in this Act affects the validity of— | |
(a) any provision of the plan which was included in it at any time before | |
6th April 2003 in accordance with the provisions of Schedule 8 to FA | |
2000 as then in force, or | |
(b) any award of shares under the plan which was made at any such | 15 |
time in accordance with the provisions of that Schedule as then in | |
force. | |
(6) In this paragraph— | |
“award of shares” means the appropriation of shares to, or the | |
acquisition of shares on behalf of, a person; | 20 |
“employee share ownership plan” has the meaning given by | |
paragraph 1(1) of Schedule 8 to FA 2000. | |
69 (1) Any reference in any enactment, instrument or document— | |
(a) to an employee share ownership plan, or | |
(b) to an employee share ownership plan approved under Schedule 8 to | 25 |
FA 2000, | |
is to be read as including, in relation to times after 5th April 2003, a reference | |
to a share incentive plan or to a share incentive plan approved under | |
Schedule 2 to this Act. | |
(2) Any reference in any enactment, instrument or document— | 30 |
(a) to a share incentive plan (or SIP), or | |
(b) to a share incentive plan (or SIP) approved under Schedule 2 to this | |
Act, | |
is to be read as including, in relation to times before 6th April 2003, a | |
reference to an employee share ownership plan or to an employee share | 35 |
ownership plan approved under Schedule 8 to FA 2000. | |
(3) Accordingly any reference in the SIP code to shares awarded under an | |
approved SIP is to be read as including, in relation to times before 6th April | |
2003, a reference to shares awarded under a plan approved under Schedule | |
8 to FA 2000. | 40 |
(4) Any reference in a plan within paragraph 68(1) to a person chargeable to tax | |
under Case I of Schedule E is to be read as including, in relation to times after | |
5th April 2003, a reference to a person whose earnings fall within paragraph | |
8(2) of Schedule 2 to this Act. | |
(5) This paragraph— | 45 |
(a) is without prejudice to Part 1 of this Schedule, and | |
(b) applies only in so far as the context permits. | |
(6) In this paragraph— | |
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“awarded” means appropriated to, or acquired on behalf of, a person; | |
“employee share ownership plan” has the same meaning as in | |
paragraph 68. | |
70 Nothing in paragraph 91(4) of Schedule 2 of this Act (jointly owned | |
companies) prevents a company being a constituent company in a group | 5 |
plan (within the meaning of that Schedule) if it was a participating company | |
in that plan (within the meaning of Schedule 8 to FA 2000) immediately | |
before 24th July 2002. | |
Approved SAYE option schemes | |
71 (1) This paragraph applies where, immediately before 6th April 2003, a savings- | 10 |
related share option scheme was approved under Schedule 9 to ICTA | |
(approved share option schemes and profit-sharing schemes). | |
(2) On and after that date the scheme is to be treated as an SAYE option scheme | |
approved by the Inland Revenue under Schedule 3 to this Act. | |
(3) Sub-paragraph (2) has effect even if the provisions of the scheme do not | 15 |
wholly conform with the provisions of Schedule 3 to this Act, but it has effect | |
without prejudice to— | |
(a) paragraphs 42 and 43 of that Schedule (withdrawal or loss of | |
approval), and | |
(b) any approved alteration of the scheme. | 20 |
(4) For the purposes of paragraph 42 of Schedule 3, as it applies to the scheme, | |
nothing is to be regarded as a disqualifying event if it would not have | |
resulted in any of the former approval requirements ceasing to be met. | |
The “former approval requirements” means the requirements of Schedule 9 | |
to ICTA by reference to which the scheme was approved. | 25 |
(5) Nothing in this Act affects the validity of— | |
(a) any provision of the scheme which was included in it at any time | |
before 6th April 2003 in accordance with the provisions of Schedule | |
9 to ICTA as then in force, or | |
(b) any rights obtained under the scheme which were obtained at any | 30 |
such time in accordance with the provisions of that Schedule as then | |
in force. | |
(6) In this paragraph “savings-related share option scheme” has the meaning | |
given by paragraph 1(1) of Schedule 9 to ICTA. | |
72 (1) Any reference in the SAYE code to a share option granted in accordance with | 35 |
the provisions of an approved SAYE option scheme is to be read as | |
including, in relation to times before 6th April 2003, a reference to a right to | |
acquire shares obtained in accordance with the provisions of a savings- | |
related share option scheme approved under Schedule 9 to ICTA. | |
(2) Any reference in a scheme within paragraph 71(1) to a person chargeable to | 40 |
tax under Case I of Schedule E is to be read as including, in relation to times | |
after 5th April 2003, a reference to a person whose earnings fall within | |
paragraph 6(2)(c) of Schedule 3 to this Act. | |
(3) This paragraph— | |
(a) is without prejudice to Part 1 of this Schedule, and | 45 |
(b) applies only in so far as the context permits. | |
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(4) In this paragraph “savings-related share option scheme” has the same | |
meaning as in paragraph 71. | |
Approved CSOP schemes | |
73 (1) This paragraph applies where, immediately before 6th April 2003, a | |
discretionary share option scheme was approved under Schedule 9 to ICTA | 5 |
(approved share option schemes and profit-sharing schemes). | |
(2) On and after that date the scheme is to be treated as a CSOP scheme | |
approved by the Inland Revenue under Schedule 4 to this Act. | |
(3) Sub-paragraph (2) has effect even if the provisions of the scheme do not | |
wholly conform with the provisions of Schedule 4 to this Act, but they are | 10 |
without prejudice to— | |
(a) paragraphs 30 and 31 of that Schedule (withdrawal or loss of | |
approval), and | |
(b) any approved alteration of the scheme. | |
(4) For the purposes of paragraph 30 of Schedule 4, as it applies to the scheme, | 15 |
nothing is to be regarded as a disqualifying event if it would not have | |
resulted in any of the former approval requirements ceasing to be met. | |
The “former approval requirements” means the requirements of Schedule 9 | |
to ICTA by reference to which the scheme was approved. | |
(5) Nothing in this Act affects the validity of— | 20 |
(a) any provision of the scheme which was included in it at any time | |
before 6th April 2003 in accordance with the provisions of Schedule | |
9 to ICTA as then in force, or | |
(b) any rights obtained under the scheme which were obtained at any | |
such time in accordance with the provisions of that Schedule as then | 25 |
in force. | |
(6) In this paragraph “discretionary share option scheme” means a share option | |
scheme other than a savings-related share option scheme (as defined by | |
paragraph 1(1) of Schedule 9 to ICTA). | |
74 (1) Any reference in the CSOP code to a share option granted in accordance | 30 |
with the provisions of an approved CSOP scheme is to be read as including, | |
in relation to times before 6th April 2003, a reference to a right to acquire | |
shares obtained in accordance with the provisions of a discretionary share | |
option scheme approved under Schedule 9 to ICTA. | |
(2) This paragraph— | 35 |
(a) is without prejudice to Part 1 of this Schedule, | |
(b) applies only in so far as the context permits, and | |
(c) has effect subject to paragraph 75. | |
(3) In this paragraph “discretionary share option scheme” has the same | |
meaning as in paragraph 73. | 40 |
75 (1) This paragraph has effect where, immediately before 6th April 2003, a | |
discretionary share option scheme which was approved before 29th April | |
1996— | |
(a) is approved under Schedule 9 to ICTA, and | |
(b) has effect subject to the modifications made by paragraphs 2 and 3 of | 45 |
Schedule 16 to FA 1996 (scheme to have effect, despite anything | |
included in it to the contrary, as if it contained provisions required | |
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