|
| |
| |
“redundancy” means redundancy within the meaning of ERA | |
1996 or ER(NI)O 1996, and | |
“retirement” means retirement on or after reaching a retirement | |
age specified in the scheme.”. | |
(4) For section 525(1)(b) (no charge in respect of post-acquisition benefits) | 5 |
substitute— | |
“(b) Condition A or B (as set out in section 524(2) or (2A)) is met.”. | |
(5) This paragraph has effect in relation to any exercise of an option on or after | |
9th April 2003. | |
15 (1) Schedule 4 (approved CSOP schemes) is amended as follows. | 10 |
(2) After paragraph 35 insert— | |
“Retirement age | |
35A A retirement age specified in a CSOP scheme— | |
(a) must be the same for men and women, and | |
(b) must not be less than 55.”. | 15 |
Meaning of “material interest” | |
16 (1) In paragraphs 10(2) and (3), 11(3) and (4) and 13(2) (material interest), for | |
“10%” substitute “25%”. | |
(2) This paragraph has effect for the purpose of determining whether a person | |
is eligible to participate in a scheme on the date on which this Act is passed | 20 |
or any later date (by altering what constitutes a material interest on that date | |
and within the 12 months preceding that date). | |
Alteration of schemes | |
17 (1) Paragraph 30 (withdrawal of approval) is amended as follows. | |
(2) In sub-paragraph (2), after “to be met;” insert— | 25 |
“(aa) an alteration is made in a key feature of the scheme | |
without the approval of the Inland Revenue;”. | |
(3) After that sub-paragraph insert— | |
“(3) For the purposes of sub-paragraph (2)(aa) the Inland Revenue | |
may not withhold their approval unless it appears to them at the | 30 |
time in question that the scheme as proposed to be altered would | |
not then be approved on an application under paragraph 28. | |
(4) For the purposes of that sub-paragraph a “key feature” of a scheme | |
is a provision of the scheme which is necessary in order to meet the | |
requirements of this Schedule.”. | 35 |
(4) For paragraph 31 (approval ineffective after unapproved alteration and | |
notice of decisions) and the heading before it substitute— | |
“Notice of decision about alteration | |
31 Where the Inland Revenue— | |
(a) have been requested to approve any alteration in a CSOP | 40 |
scheme that has been approved, and | |
| |
| |
|
| |
| |
(b) have decided whether or not to approve the alteration, | |
they must give notice of their decision to the scheme organiser.”. | |
(5) For paragraph 32(1)(b) (appeal against decision not to approve alteration) | |
substitute— | |
“(b) decide to refuse approval under paragraph 30(2)(aa).”. | 5 |
PAYE | |
18 (1) Section 701(2)(c) (PAYE: exclusions from meaning of “asset”) is amended as | |
follows. | |
(2) In sub-paragraph (i), omit “or 4 (approved CSOP schemes)”. | |
(3) After that sub-paragraph insert— | 10 |
“(ia) any shares acquired by the employee (whether or not | |
as a result of the exercise of a right to acquire shares) | |
under a scheme approved under Schedule 4 | |
(approved CSOP schemes), other than shares | |
acquired as a result of the exercise of the right before | 15 |
the third anniversary of the date on which it was | |
granted or later than the tenth anniversary of that | |
date;”. | |
(4) In sub-paragraph (ii), for “such a scheme” substitute “a scheme such as is | |
mentioned in sub-paragraph (i) or (ia)”. | 20 |
(5) This paragraph has effect in relation to shares acquired on or after 9th April | |
2003. | |
Schedule 22 | |
Section 139 | |
Employee securities and options | |
Introductory | 25 |
1 The Income Tax (Earnings and Pensions) Act 2003 (c. 1) is amended as | |
follows. | |
| |
| |
|
| |
| |
Main provisions | |
2 (1) For Chapter 1 of Part 7 (and the heading of that Part) substitute— | |
“Employment income: income and exemptions relating to securities | |
Chapter 1 | |
Introduction | 5 |
General | |
417 Scope of Part 7 | |
(1) This Part contains special rules about cases where securities, | |
interests in securities or securities options are acquired in connection | |
with an employment. | 10 |
(2) The rules are contained in— | |
Chapter 2 (restricted securities), | |
Chapter 3 (convertible securities), | |
Chapter 3A (securities with artificially depressed market | |
value), | 15 |
Chapter 3B (securities with artificially enhanced market value), | |
Chapter 3C (securities acquired for less than market value), | |
Chapter 3D (securities disposed of for more than market value), | |
Chapter 4 (post-acquisition benefits from securities), | |
Chapter 5 (securities options), | 20 |
Chapter 6 (approved share incentive plans), | |
Chapter 7 (approved SAYE option schemes), | |
Chapter 8 (approved CSOP schemes), | |
Chapter 9 (enterprise management incentives), and | |
Chapter 10 (priority share allocations). | 25 |
(3) The following make provision for amounts to count as employment | |
income— | |
Chapters 2 to 6, and | |
Chapter 8. | |
(4) The following make provision for exemptions and reliefs from | 30 |
income tax— | |
Chapters 2 and 3, and | |
Chapters 5 to 10. | |
(5) Chapter 11 contains supplementary provisions relating to employee | |
benefit trusts. | 35 |
(6) Section 5(1) (application of employment income Parts to office- | |
holders generally) does not apply to Chapters 6 to 10; and section | |
549(5) makes provision about its application to Chapter 11. | |
418 Other related provisions | |
(1) In Part 3— | 40 |
| |
| |
|
| |
| |
Chapter 1 (earnings), and | |
Chapter 10 (taxable benefits: residual liability to charge), | |
may also have effect in relation to securities and interests in | |
securities (but not securities options). | |
(2) Part 7 of Schedule 7 (transitional provisions relating to securities and | 5 |
securities options) may also be relevant. | |
(3) In view of section 49 of FA 2000 (phasing out of APS schemes) the | |
following are not rewritten in this Act and continue in force | |
unaffected by the repeals made by this Act— | |
section 186 of ICTA (APS schemes) and section 187 of that Act | 10 |
(interpretation) so far as relating to APS schemes, and | |
Schedule 9 to ICTA (approval of share schemes) so far as | |
relating to APS schemes and Schedule 10 to that Act (further | |
provisions about APS schemes). | |
“APS schemes” means profit sharing schemes approved under | 15 |
Schedule 9 to ICTA. | |
(4) Sections 138 to 140 of ICTA (share acquisitions by directors and | |
employees) continue to apply in relation to shares or interests in | |
shares acquired before 26th October 1987 (see paragraph 57 of | |
Schedule 7). | 20 |
419 Negative amounts treated as nil | |
If the result given by any formula under any provision of this Part | |
would otherwise be a negative amount, the result is to be taken to be | |
nil instead. | |
Interpretation of Chapters 1 to 5 | 25 |
420 Meaning of “securities” etc | |
(1) Subject to subsections (5) and (6), for the purposes of this Chapter | |
and Chapters 2 to 5 the following are “securities”— | |
(a) shares in any body corporate (wherever incorporated) or in | |
any unincorporated body constituted under the law of a | 30 |
country or territory outside the United Kingdom, | |
(b) debentures, debenture stock, loan stock, bonds, certificates of | |
deposit and other instruments creating or acknowledging | |
indebtedness, | |
(c) warrants and other instruments entitling their holders to | 35 |
subscribe for securities (whether or not in existence or | |
identifiable), | |
(d) certificates and other instruments conferring rights in respect | |
of securities held by persons other than the persons on whom | |
the rights are conferred and the transfer of which may be | 40 |
effected without the consent of those persons, | |
(e) units in a collective investment scheme, | |
(f) futures, and | |
(g) rights under contracts for differences or contracts similar to | |
contracts for differences. | 45 |
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| |
|
| |
| |
(2) In subsection (1)(e) “collective investment scheme” means | |
arrangements— | |
(a) which are made with respect to property of any description, | |
including money, and | |
(b) the purpose or effect of which is to enable persons taking part | 5 |
in the arrangements (whether by becoming owners of the | |
property or any part of it or otherwise) to participate in or | |
receive profits or income arising from the acquisition, | |
holding, management or disposal of the property or sums | |
paid out of such profits or income. | 10 |
(3) In subsection (1)(f) “futures” means rights under a contract for the | |
sale of a commodity or other property under which delivery is to be | |
made at a future date at a price agreed when the contract is made; | |
and for this purpose a price is to be taken to be agreed when the | |
contract is made— | 15 |
(a) if it is left to be determined by reference to the price at which | |
a contract is to be entered into on a market or exchange or | |
could be entered into at a time and place specified in the | |
contract, and | |
(b) in a case where the contract is expressed to be by reference to | 20 |
a standard lot and quality, even if provision is made for a | |
variation in the price to take account of any variation in | |
quantity or quality on delivery. | |
(4) For the purposes of subsection (1)(g) a contract similar to a contract | |
for differences is a contract— | 25 |
(a) which is not a contract for differences, but | |
(b) the purpose or pretended purpose of which is to secure a | |
profit or avoid a loss by reference to fluctuations in the value | |
or price of property or an index or other factor designated in | |
the contract. | 30 |
(5) The following are not “securities” for the purposes of this Chapter or | |
Chapters 2 to 5— | |
(a) cheques and other bills of exchange, bankers’ drafts and | |
letters of credit (other than bills of exchange accepted by a | |
banker), | 35 |
(b) money and statements showing balances on a current, | |
deposit or savings account, | |
(c) leases and other dispositions of property and heritable | |
securities, | |
(d) rights under contracts of insurance (within the meaning of | 40 |
the Financial Services and Markets Act 2000 (Regulated | |
Activities) Order 2001), and | |
(e) options. | |
(6) The Treasury may by order amend subsections (1) to (5). | |
(7) An order under subsection (6) may include any appropriate | 45 |
consequential provision (including provision amending any | |
enactment). | |
(8) In this Chapter and Chapters 2 to 5— | |
| |
| |
|
| |
| |
“interest”, in relation to securities (or shares), means an interest | |
in them less than full beneficial ownership and includes an | |
interest in proceeds of their sale, but does not include a right | |
to acquire them, | |
“securities option” means a right to acquire securities, and | 5 |
“shares” includes stock. | |
421 Meaning of “market value” etc | |
(1) In this Chapter and Chapters 2 to 5 “market value” has the same | |
meaning as it has for the purposes of TCGA 1992 by virtue of Part 8 | |
of that Act. | 10 |
(2) Where consideration for anything is given in the form of an asset (as | |
opposed to a payment), any reference in this Chapter or any of | |
Chapters 2 to 5 to the amount of the consideration is to the market | |
value of the asset. | |
421A Meaning of “consideration” | 15 |
(1) This section applies for determining for the purposes of Chapters 2 | |
to 5 the amount of the consideration given for anything. | |
(2) If any consideration is given partly in respect of one thing and partly | |
in respect of another, the amount given in respect of the different | |
things is to determined on a just and reasonable apportionment. | 20 |
(3) The consideration which is taken to be given wholly or partly for | |
anything does not include the performance of any duties of, or in | |
connection with, an employment. | |
(4) No amount is to be counted more than once in calculating the | |
amount of any consideration. | 25 |
Application of Chapters 2 to 4 | |
421B Application of Chapters 2 to 4 | |
(1) Subject as follows (and to any provision contained in Chapters 2 to | |
4) those Chapters apply to securities, or an interest in securities, | |
acquired by a person where the right or opportunity to acquire the | 30 |
securities or interest is available by reason of an employment of that | |
person or any other person. | |
(2) For the purposes of subsection (1)— | |
(a) securities are, or an interest in securities is, acquired at the | |
time when the person acquiring the securities or interest | 35 |
becomes beneficially entitled to those securities or that | |
interest (and not, if different, the time when the securities are, | |
or interest is, conveyed or transferred), and | |
(b) “employment” includes a former or prospective | |
employment. | 40 |
(3) A right or opportunity to acquire securities or an interest in securities | |
made available by a person’s employer, or by a person connected | |
with a person’s employer, is to be regarded for the purposes of | |
| |
| |
|
| |
| |
subsection (1) as available by reason of an employment of that | |
person unless— | |
(a) the person by whom the right or opportunity is made | |
available is an individual, and | |
(b) the right or opportunity is made available in the normal | 5 |
course of the domestic, family or personal relationships of | |
that person. | |
(4) Chapters 2 to 4 cease to apply to securities, or an interest in securities, | |
when subsection (5), (6) or (7) is satisfied. | |
(5) This subsection is satisfied immediately after the securities are, or the | 10 |
interest in securities is, disposed of otherwise than to an associated | |
person. | |
(6) This subsection is satisfied immediately before the death of the | |
employee. | |
(7) This subsection is satisfied 7 years after the first date after the | 15 |
acquisition on which the employee is an employee of none of the | |
following— | |
(a) the employer, | |
(b) (if the securities are, or the interest in securities is an interest | |
in, securities issued by a company) the company by which | 20 |
they are issued, or | |
(c) a person connected with a person within paragraph (a) or (b). | |
(8) In this Chapter and Chapters 2 to 4— | |
“the acquisition”, in relation to employment-related securities, | |
means the acquisition of the employment-related securities | 25 |
pursuant to the right or opportunity available by reason of | |
the employment, | |
“the employment”, in relation to employment-related | |
securities, means the employment by reason of which the | |
right or opportunity to acquire the employment-related | 30 |
securities is available (“the employee” and “the employer” | |
being construed accordingly unless otherwise indicated), | |
and | |
“employment-related securities” means securities or an interest | |
in securities to which Chapters 2 to 4 apply (ignoring any | 35 |
provision of any of those Chapters which limits the | |
application of the Chapter to a particular description or | |
descriptions of employment-related securities). | |
421C Associated persons | |
(1) For the purposes of this Chapter and Chapters 2 to 4 the following | 40 |
are “associated persons” in relation to employment-related | |
securities— | |
(a) the person who acquired the employment-related securities | |
on the acquisition, | |
(b) (if different) the employee, and | 45 |
(c) any relevant linked person. | |
(2) A person is a relevant linked person if— | |
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