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70 Nothing in paragraph 91(4) of Schedule 2 to this Act (jointly owned | |
companies) prevents a company being a constituent company in a group | |
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. | 5 |
Approved SAYE option schemes | |
71 (1) This paragraph applies where, immediately before 6th April 2003, a savings- | |
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 | 10 |
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 | |
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 | 15 |
approval), and | |
(b) any approved alteration of the scheme. | |
(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. | 20 |
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— | |
(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 | 25 |
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 | |
in force. | |
(6) In this paragraph “savings-related share option scheme” has the meaning | 30 |
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 | |
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- | 35 |
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 | |
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. | 40 |
(3) This paragraph— | |
(a) is without prejudice to Part 1 of this Schedule, and | |
(b) applies only in so far as the context permits. | |
(4) In this paragraph “savings-related share option scheme” has the same | |
meaning as in paragraph 71. | 45 |
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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 | |
(approved share option schemes and profit-sharing schemes). | |
(2) On and after that date the scheme is to be treated as a CSOP scheme | 5 |
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 | |
without prejudice to— | |
(a) paragraphs 30 and 31 of that Schedule (withdrawal or loss of | 10 |
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, | |
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. | 15 |
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— | |
(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 | 20 |
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 | |
in force. | |
(6) In this paragraph “discretionary share option scheme” means a share option | 25 |
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 | |
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 | 30 |
shares obtained in accordance with the provisions of a discretionary share | |
option scheme approved under Schedule 9 to ICTA. | |
(2) This paragraph— | |
(a) is without prejudice to Part 1 of this Schedule, | |
(b) applies only in so far as the context permits, and | 35 |
(c) has effect subject to paragraph 75. | |
(3) In this paragraph “discretionary share option scheme” has the same | |
meaning as in paragraph 73. | |
75 (1) This paragraph has effect where, immediately before 6th April 2003, a | |
discretionary share option scheme which was approved before 29th April | 40 |
1996— | |
(a) is approved under Schedule 9 to ICTA, and | |
(b) has effect subject to the modifications made by paragraphs 2 and 3 of | |
Schedule 16 to FA 1996 (scheme to have effect, despite anything | |
included in it to the contrary, as if it contained provisions required | 45 |
by paragraphs 28 and 29 of Schedule 9 to ICTA: limit of £30,000 on | |
value of shares subject to outstanding options and requirements as | |
to price for acquisition of shares). | |
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| |
(2) On and after 6th April 2003 the scheme is to continue to have effect as if it | |
provided— | |
(a) that an individual may not be granted share options under it which | |
would at the time when they are granted cause the aggregate market | |
value of the shares which the individual may acquire by exercising | 5 |
share options granted under— | |
(i) the scheme, or | |
(ii) any other approved CSOP scheme established by the scheme | |
organiser or an associated company of the scheme organiser, | |
to exceed or further exceed £30,000 (leaving out of account share | 10 |
options that have already been exercised), and | |
(b) that the price at which shares may be acquired by the exercise of a | |
share option granted under the scheme must not be manifestly less | |
than the market value of shares of the same class at that time (or, if | |
the Board of Inland Revenue and the scheme organiser agree in | 15 |
writing, at an earlier time or times stated in the agreement). | |
(3) For the purposes of sub-paragraph (2)(a), the market value of shares is to be | |
calculated as at— | |
(a) the time when the options relating to them were granted, or | |
(b) if an agreement relating to them has been made under paragraph 22 | 20 |
of Schedule 4 (requirements as to price for acquisition of shares) the | |
earlier time or times stated in the agreement. | |
(4) Sub-paragraph (2) is subject to any amendment to the scheme made after | |
28th April 1996 (whether before or after 6th April 2003). | |
(5) In this paragraph “discretionary share option scheme” has the same | 25 |
meaning as in paragraph 73. | |
(6) Other expressions used in this paragraph and contained in the index at the | |
end of Schedule 4 (index of expressions defined in the CSOP code) have the | |
meaning indicated by that index. | |
76 (1) This paragraph applies to any right obtained by an individual— | 30 |
(a) under a discretionary share option scheme approved under | |
Schedule 9 to ICTA, and | |
(b) during the period beginning with 17th July 1995 and ending with | |
28th April 1996, | |
if, by virtue of section 115 of FA 1996 (transitional provisions which gave | 35 |
retrospective effect to certain amendments relating to discretionary share | |
option schemes), the right was, immediately before 6th April 2003, treated | |
for the purposes of sections 185 to 187 of and Schedule 9 to ICTA as having | |
been obtained otherwise than in accordance with the provisions of a | |
discretionary share option scheme approved under that Schedule. | 40 |
(2) For the purposes of the CSOP code, the right is to be treated as having been | |
granted otherwise than in accordance with the provisions of an approved | |
CSOP scheme. | |
(3) In this paragraph “discretionary share option scheme” has the same | |
meaning as in paragraph 73. | 45 |
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Enterprise management incentives | |
77 (1) This paragraph applies where, immediately before 6th April 2003, a share | |
option was a qualifying option for the purposes of Schedule 14 to FA 2000 | |
(enterprise management incentives). | |
(2) On and after that date the share option is to be treated as a qualifying option | 5 |
for the purposes of the EMI code. | |
(3) Sub-paragraph (2) has effect even if the requirements that had to be met in | |
order for the share option, or any share option replaced by it, to be a | |
qualifying option for the purposes of Schedule 14 to FA 2000 differed to any | |
extent from those set out in Schedule 5. | 10 |
(4) In this paragraph “share option” means a right to acquire shares. | |
78 (1) In section 535 (disqualifying events relating to employee), subsections (2) to | |
(6) apply to the tax year 2003-04 and later tax years (in accordance with | |
section 723(1)). | |
(2) In Schedule 14 to FA 2000 (enterprise management incentives), paragraph 52 | 15 |
(disqualifying events: actual relevant working time) continues to apply in | |
relation to April 2003 for the purpose of calculating, in accordance with sub- | |
paragraphs (3) to (5) of that paragraph, whether a disqualifying event is to | |
be taken to have occurred at the end of the tax year 2002-03. | |
(3) If a disqualifying event is to be taken to have so occurred, it (like anything | 20 |
else which under that Schedule is a disqualifying event immediately before | |
6th April 2003) is a disqualifying event for the purposes of Schedule 5 to this | |
Act. | |
79 (1) Section 536 (other disqualifying events) has effect in relation to any | |
alteration made to the share capital of a company before 11th May 2001 with | 25 |
the following modification. | |
(2) In subsection (1), for paragraphs (b) and (c) substitute— | |
“(b) any alteration to the share capital of the relevant | |
company to which section 537 applies and is made without | |
the prior approval of the Inland Revenue;”. | 30 |
80 (1) Section 537 (alteration of share capital for purposes of section 536) has effect | |
in relation to any alteration made to the share capital of a company before | |
11th May 2001 with the following modifications. | |
(2) In subsection (1), omit “and (c)”. | |
(3) In subsection (2), substitute “This section” for “This subsection”. | 35 |
(4) Omit subsection (3). | |
81 In a case where the qualifying option was granted before 6th April 2003, | |
section 540(2) (no charge on acquisition of shares as taxable benefit) applies | |
in relation to the time when the option was granted with the substitution of | |
“the employee was chargeable to tax under Case I of Schedule E” for the | 40 |
words from “the earnings” onwards. | |
82 (1) This paragraph relates to the operation of section 541(2) (effects on tax | |
charges where shares cease to be conditional only or are converted) in | |
relation to an FA 2000 option which was exercised before 6th April 2003. | |
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(2) The references to a qualifying option include an FA 2000 option which was | |
so exercised; but in relation to such an option sub-paragraph (3) applies | |
instead of section 541(3). | |
(3) For the purposes of section 541(2) “the amount of relief on the exercise of the | |
option” means the difference between— | 5 |
(a) the amount on which tax would have been chargeable under section | |
135 of ICTA (charge on exercise etc. of option) in respect of the | |
exercise of the option apart from Schedule 14 to FA 2000 (enterprise | |
management incentives), and | |
(b) the amount (if any) in fact so chargeable in accordance with that | 10 |
Schedule. | |
(4) In this paragraph an “FA 2000 option” means a qualifying option for the | |
purposes of Schedule 14 to FA 2000. | |
83 In Schedule 5 (enterprise management incentives), paragraph 41(6) (like | |
other provisions of that paragraph) applies to replacement options | 15 |
whenever granted. | |
Employee benefit trusts | |
84 In relation to times before 6th April 2003, section 549(5) (definition of | |
“employee” for purposes of Chapter 11 of Part 7) is to be read as referring to | |
a person holding an office or employment whose emoluments were | 20 |
chargeable under Schedule E. | |
Part 8 | |
Approved profit sharing schemes | |
Trustees’ duty to provide information | |
85 Any obligation imposed in accordance with paragraph 34(b) of Schedule 9 | 25 |
to ICTA (trustees’ duties to provide information) on the trustees of a profit | |
sharing scheme approved under that Schedule is to be construed as an | |
obligation, where an amount counts as employment income of a participant | |
by reason of the occurrence of any event, to inform the participant of any | |
facts relevant to determining the participant’s resulting liability to tax. | 30 |
Share incentive plans | |
86 (1) Where the trustees of an approved share incentive plan acquire shares from | |
the trustees of an approved profit sharing scheme, the disposal and the | |
acquisition by the trustees are treated for capital gains tax purposes as being | |
made for such consideration as to secure that neither a gain nor a loss | 35 |
accrues on the disposal. | |
(2) In such a case the relevant period for the purposes of paragraph 2 of | |
Schedule 7D to TCGA 1992 is determined as if the shares had been acquired | |
by the trustees of the share incentive plan at the time they were acquired by | |
the trustees of the other trust. | 40 |
This does not affect the date on which the trustees of the share incentive plan | |
are treated as acquiring the shares for the purposes of taper relief. | |
(3) In this paragraph— | |
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| |
“approved profit sharing scheme” means a profit sharing scheme | |
approved under Schedule 9 to ICTA, and | |
“approved share incentive plan” means a share incentive plan | |
approved under Schedule 2 to this Act. | |
Other share schemes: eligibility of individuals and material interests | 5 |
87 (1) In applying any of the provisions specified in sub-paragraph (2) (which deal | |
with the meaning of “material interest” for the purpose of determining | |
eligibility to participate in share schemes, etc.) the following are to be | |
disregarded— | |
(a) the interest of the trustees of any profit sharing scheme approved | 10 |
under Schedule 9 to ICTA in any shares which are held by them in | |
accordance with the plan but which have not been appropriated to | |
an individual, and | |
(b) any rights exercisable by the trustees as a result of that interest. | |
(2) The provisions referred to in sub-paragraph (1) are— | 15 |
(a) paragraph 20 of Schedule 2 (approved share incentive plans); | |
(b) paragraph 12 of Schedule 3 (approved SAYE option schemes); | |
(c) paragraph 10 of Schedule 4 (approved CSOP schemes); | |
(d) paragraph 29 of Schedule 5 (enterprise management incentives). | |
Part 9 | 20 |
Social Security income | |
Disabled person’s and working families’ tax credits | |
88 (1) This paragraph applies if, on 6th April 2003, the repeals made by TCA 2002 | |
of the provisions listed in sub-paragraph (3) have not come fully into force. | |
(2) Until the repeal of those provisions has come fully into force, Table B in | 25 |
section 677(1) of this Act is to be read as if it included references to disabled | |
person’s tax credit and working families’ tax credit. | |
(3) The provisions referred to in this paragraph are— | |
(a) in SSCBA 1992, section 128 (working families’ tax credit) and section | |
129 (disabled person’s tax credit), and | 30 |
(b) in SSCB(NI)A 1992, section 127 (working families’ tax credit) and | |
section 128 (disabled person’s tax credit). | |
Part 10 | |
PAYE | |
PAYE regulations | 35 |
89 (1) In relation to any time before the commencement of the repeals in Part VII | |
of Schedule 20 to FA 1999, section 684(2) (PAYE regulations) has effect with | |
the following modification. | |
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(2) At the end of item 5 insert “including the proving of the contents or | |
transmission of anything that the regulations allow to be transmitted to any | |
person in electronic form or by electronic means”. | |
Part 11 | |
Consequences for corporation tax | 5 |
90 (1) This paragraph applies where— | |
(a) a company is charged to corporation tax by reference to an | |
accounting period which begins before and ends on or after 6th April | |
2003, and | |
(b) because of a change in the law made by this Act, the income tax law | 10 |
relating to the accounting period is different from what it would | |
have been if that change had not been made. | |
(2) If the company so elects, this Act applies with such modifications as may be | |
necessary to secure that the income tax law relating to the accounting period | |
is the same as it would have been if the change in the law had not been made. | 15 |
(3) An election under this paragraph must be made by notice given to the Inland | |
Revenue no later than the end of the period of two years beginning with the | |
day following the last day of the accounting period. | |
(4) In this paragraph “income tax law” has the same meaning as in section 9 of | |
ICTA. | 20 |
91 (1) This paragraph applies in relation to corporation tax charged by reference to | |
an accounting period which begins before and ends on or after 6th April | |
2003. | |
(2) In its application for the purposes of corporation tax, any provision of this | |
Schedule is to be read as if— | 25 |
(a) any reference to the tax year 2003-04 were a reference to that | |
accounting period, and | |
(b) any reference to 6th April 2003 were a reference to the first day of that | |
accounting period. | |
92 (1) The provisions of this Act mentioned in sub-paragraph (2) do not have effect | 30 |
for corporation tax purposes for so much of any accounting period as falls | |
before 6th April 2003. | |
(2) The provisions are— | |
(a) in Schedule 6 (consequential amendments)— | |
(i) paragraph 11 (which replaces references in section 84A of | 35 |
ICTA to share option schemes approved under Schedule 9 to | |
that Act with references to SAYE option schemes and CSOP | |
schemes approved under this Act), and | |
(ii) paragraphs 12 and 109 (which insert Schedule 4AA to ICTA | |
(share incentive plans: corporation tax deductions)), and | 40 |
(b) the repeal by Schedule 8 (repeals) of— | |
(i) Part 12 of Schedule 8 to FA 2000 (corporation tax deductions | |
in relation to employee share option plans), and | |
(ii) so much of any other provision of Schedule 8 to that Act as is | |
necessary for the operation of Part 12. | 45 |
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