|
| |
|
(7) | Subsection (8) applies if, at any time (“the relevant time”)— |
| |
(a) | any of the earmarked shares cease to be held by or on behalf |
| |
of P solely on the basis mentioned in subsection (4)(a), but |
| |
(b) | the shares continue to be held by or on behalf of P on the basis |
| |
mentioned in section 554B(1)(a) or (b). |
| 5 |
(8) | This Part has effect as if a relevant step within section 554B were |
| |
taken at the relevant time— |
| |
(a) | the subject of which is— |
| |
(i) | the shares mentioned in subsection (7), and |
| |
(ii) | any relevant income in relation to those shares (see |
| 10 |
| |
(b) | by reason of which Chapter 2 is to apply (subject only to |
| |
| |
(9) | Subsection (10) applies if— |
| |
(a) | the relevant step mentioned in subsection (4) is taken in |
| 15 |
relation to an award which has been made as mentioned in |
| |
| |
(b) | the relevant step mentioned in subsection (4) is taken in |
| |
relation to an expected award as mentioned in subsection |
| |
(4)(a)(ii) and the award is made before the end of the final |
| 20 |
| |
(10) | This Part has effect as if a relevant step within section 554B were |
| |
taken at the end of the vesting date— |
| |
(a) | the subject of which is— |
| |
(i) | any of the earmarked shares to which none of |
| 25 |
subsections (11) to (13) applies, and |
| |
(ii) | any relevant income in relation to any of the |
| |
earmarked shares mentioned in sub-paragraph (i) |
| |
(see subsection (14)), and |
| |
(b) | by reason of which Chapter 2 is to apply (subject only to |
| 30 |
| |
(11) | This subsection applies to any earmarked shares if— |
| |
(a) | A receives the shares before the end of the vesting date, and |
| |
(b) | the receipt of the shares by A gives rise to employment |
| |
income of A which is chargeable to income tax or which is |
| 35 |
| |
(12) | This subsection applies to any earmarked shares if— |
| |
(a) | the sum of money mentioned in subsection (1)(a)(ii) (or a part |
| |
of it) is paid to A before the end of the vesting date, |
| |
(b) | the payment of the sum to A gives rise to employment |
| 40 |
income of A which is chargeable to income tax or which is |
| |
| |
(c) | the payment represents the proceeds of the disposal of the |
| |
shares or, if the payment is made from another source, |
| |
correspondingly, no further relevant step is or will be taken |
| 45 |
by P or any other person in relation to the shares or to any |
| |
sum of money or asset which (directly or indirectly) may |
| |
arise or derive, or has arisen or derived, from the shares. |
| |
|
| |
|
| |
|
(13) | This subsection applies to any earmarked shares if— |
| |
(a) | before the end of the vesting date, the award (or any part of |
| |
it) is revoked in accordance with the deferred award terms, |
| |
| |
(b) | correspondingly, no further relevant step is or will be taken |
| 5 |
by P or any other person in relation to the shares or to any |
| |
sum of money or asset which (directly or indirectly) may |
| |
arise or derive, or has arisen or derived, from the shares. |
| |
(14) | In subsections (6)(a)(ii), (8)(a)(ii) and (10)(a)(ii) “relevant income”, in |
| |
relation to any earmarked shares, means any income— |
| 10 |
(a) | which, before the relevant step is treated as being taken by |
| |
subsection (6), (8) or (10) (as the case may be)— |
| |
(i) | arises (directly or indirectly) from the shares, and |
| |
(ii) | is the subject of a relevant step within section 554B |
| |
taken by P by reason of which Chapter 2 would apply |
| 15 |
apart from section 554P, and |
| |
(b) | which, at the time the relevant step is treated as being taken, |
| |
continues to be held by or on behalf of P on the basis |
| |
mentioned in section 554B(1)(a) or (b). |
| |
554K | Exclusions: earmarking for employee share schemes (2) |
| 20 |
(1) | This section applies if— |
| |
(a) | there is an arrangement (“B’s employee share scheme”) |
| |
under which, in respect of A’s employment with B, B may |
| |
make to A an award of a sum of money the amount of which |
| |
is to be determined by reference to the market value of any |
| 25 |
relevant shares at the time the sum is to be paid, |
| |
(b) | the main purpose of the award would not be the provision of |
| |
| |
(c) | the award would be on terms (“the deferred award terms”) |
| |
under which the sum of money is to be paid only if a specified |
| 30 |
exit event, or an exit event within a specified description, |
| |
| |
(d) | as at the time the award is made, there would be a reasonable |
| |
chance that the specified exit event, or an exit event within |
| |
the specified description, will occur. |
| 35 |
(2) | For the purposes of this section an “exit event” occurs if— |
| |
(a) | relevant shares are admitted to trading on a stock exchange, |
| |
| |
(b) | all the relevant shares, or a substantial proportion of them, in |
| |
a company are disposed of to persons none of whom are |
| 40 |
connected with any of the persons making any disposal, |
| |
| and in this section references to relevant shares are to be read as |
| |
references only to relevant shares in a company the business of |
| |
which consists wholly or mainly in the carrying on of a trade or |
| |
| 45 |
(3) | For the purpose of determining whether the requirements of |
| |
subsection (1)(c) and (d) would be met, ignore any of the deferred |
| |
award terms which would deal with what is to happen if A dies after |
| |
the making of the award but before the specified exit event, or an exit |
| |
event within the specified description, occurs. |
| 50 |
|
| |
|
| |
|
(4) | Chapter 2 does not apply by reason of a relevant step within section |
| |
554B (by reason of which it would otherwise apply) taken by a |
| |
| |
(a) | the subject of the relevant step is relevant shares (“earmarked |
| |
shares”) which are earmarked, or otherwise start being held, |
| 5 |
solely with a view to the meeting of— |
| |
(i) | an award of a sum of money made to A under B’s |
| |
employee share scheme as mentioned in subsection |
| |
(1)(a) in relation to which the requirements of |
| |
subsection (1)(b) to (d) are met (subject to subsection |
| 10 |
| |
(ii) | an award of a sum of money which is expected to be |
| |
made to A under B’s employee share scheme as |
| |
mentioned in subsection (1)(a) and in relation to |
| |
which the requirements of subsection (1)(b) to (d) |
| 15 |
would be met (subject to subsection (3)), |
| |
(b) | none of the earmarked shares are admitted to trading on a |
| |
| |
(c) | the number of relevant shares of any type which are |
| |
earmarked shares does not exceed the maximum number of |
| 20 |
relevant shares of that type which might reasonably be |
| |
expected to be needed for meeting the award or expected |
| |
| |
(d) | there is no connection (direct or indirect) between the |
| |
relevant step and a tax avoidance arrangement. |
| 25 |
(5) | If the relevant step mentioned in subsection (4) is taken in relation to |
| |
an expected award as mentioned in subsection (4)(a)(ii), subsection |
| |
| |
(a) | the award is not made before the end of the date (“the final |
| |
award date”) which is three months after the date on which P |
| 30 |
takes the relevant step, and |
| |
(b) | as at the end of the final award date, any of the earmarked |
| |
shares continue to be held by or on behalf of P solely on the |
| |
basis mentioned in subsection (4)(a). |
| |
(6) | This Part has effect as if a relevant step within section 554B were |
| 35 |
taken at the end of the final award date— |
| |
(a) | the subject of which is— |
| |
(i) | the shares which continue to be held as mentioned in |
| |
| |
(ii) | any relevant income in relation to those shares (see |
| 40 |
| |
(b) | by reason of which Chapter 2 is to apply (subject only to |
| |
| |
(7) | Subsection (8) applies if, at any time (“the relevant time”)— |
| |
(a) | any of the earmarked shares cease to be held by or on behalf |
| 45 |
of P solely on the basis mentioned in subsection (4)(a), but |
| |
(b) | the shares continue to be held by or on behalf of P on the basis |
| |
mentioned in section 554B(1)(a) or (b). |
| |
(8) | This Part has effect as if a relevant step within section 554B were |
| |
taken at the relevant time— |
| 50 |
|
| |
|
| |
|
(a) | the subject of which is— |
| |
(i) | the shares mentioned in subsection (7), and |
| |
(ii) | any relevant income in relation to those shares (see |
| |
| |
(b) | by reason of which Chapter 2 is to apply (subject only to |
| 5 |
| |
(9) | Subsection (10) applies if— |
| |
(a) | the relevant step mentioned in subsection (4) is taken in |
| |
relation to an award which has been made as mentioned in |
| |
| 10 |
(b) | the relevant step mentioned in subsection (4) is taken in |
| |
relation to an expected award as mentioned in subsection |
| |
(4)(a)(ii) and the award is made before the end of the final |
| |
| |
| and the specified exit event, or an exit event within the specified |
| 15 |
| |
(10) | This Part has effect as if a relevant step within section 554B were |
| |
taken at the end of the exit period— |
| |
(a) | the subject of which is— |
| |
(i) | any of the earmarked shares to which subsection (11) |
| 20 |
| |
(ii) | any relevant income in relation to any of the |
| |
earmarked shares mentioned in sub-paragraph (i) |
| |
(see subsection (13)), and |
| |
(b) | by reason of which Chapter 2 is to apply (subject only to |
| 25 |
| |
(11) | This subsection applies to any earmarked shares if— |
| |
(a) | the sum of money mentioned in subsection (1)(a) (or a part of |
| |
it) is paid to A before the end of the exit period, |
| |
(b) | the payment of the sum to A gives rise to employment |
| 30 |
income of A which is chargeable to income tax or which is |
| |
| |
(c) | the payment represents the proceeds of the disposal of the |
| |
shares or, if the payment is made from another source, |
| |
correspondingly, no further relevant step is or will be taken |
| 35 |
by P or any other person in relation to the shares or to any |
| |
sum of money or asset which (directly or indirectly) may |
| |
arise or derive, or has arisen or derived, from the shares. |
| |
(12) | In subsections (10) and (11)(a) “the exit period” means the period of |
| |
three months starting with the date on which the exit event occurs. |
| 40 |
(13) | In subsections (6)(a)(ii), (8)(a)(ii) and (10)(a)(ii) “relevant income”, in |
| |
relation to any earmarked shares, means any income— |
| |
(a) | which, before the relevant step is treated as being taken by |
| |
subsection (6), (8) or (10) (as the case may be)— |
| |
(i) | arises (directly or indirectly) from the shares, and |
| 45 |
(ii) | is the subject of a relevant step within section 554B |
| |
taken by P by reason of which Chapter 2 would apply |
| |
apart from section 554P, and |
| |
|
| |
|
| |
|
(b) | which, at the time the relevant step is treated as being taken, |
| |
continues to be held by or on behalf of P on the basis |
| |
mentioned in section 554B(1)(a) or (b). |
| |
554L | Exclusions: earmarking for employee share schemes (3) |
| |
(1) | This section applies if— |
| 5 |
(a) | there is an arrangement (“B’s employee share scheme”) |
| |
under which, in respect of A’s employment with B, B may |
| |
grant A a right (“a relevant share option”)— |
| |
(i) | to acquire relevant shares, or |
| |
(ii) | to receive a sum of money the amount of which is to |
| 10 |
be determined by reference to the market value of any |
| |
relevant shares at the time the sum is to be paid, |
| |
(b) | the main purpose of the grant of the relevant share option |
| |
would not be the provision of relevant benefits, |
| |
(c) | the grant would be made on terms (“the deferred grant |
| 15 |
| |
(i) | the relevant share option is not to be exercisable by A |
| |
before a specified date (“the vesting date”) which is |
| |
after the date (“the grant date”) on which the grant is |
| |
| 20 |
(ii) | the relevant share option is not to be exercisable at all |
| |
by A if specified conditions are not met on or before |
| |
| |
(d) | the vesting date would not be more than five years after the |
| |
| 25 |
(e) | as at the grant date, there would be a reasonable chance that |
| |
the relevant share option will not be exercisable at all by A |
| |
because not all the specified conditions will be met on or |
| |
| |
(2) | For the purpose of determining whether the requirements of |
| 30 |
subsection (1)(c)(i) and (ii) and (d) and (e) would be met, ignore any |
| |
of the deferred grant terms which would deal with what is to happen |
| |
if A dies after the making of the grant but before the end of the |
| |
| |
(3) | In addition to the provision mentioned in subsection (1)(c)(ii) (which |
| 35 |
must be included), the deferred grant terms may also provide that |
| |
the relevant share option may be exercised by A only in part if |
| |
specified conditions are not met on or before the vesting date. |
| |
(4) | Chapter 2 does not apply by reason of a relevant step within section |
| |
554B (by reason of which it would otherwise apply) taken by a |
| 40 |
| |
(a) | the subject of the relevant step is relevant shares (“earmarked |
| |
shares”) which are earmarked, or otherwise start being held, |
| |
solely with a view to providing shares, or paying a sum of |
| |
| 45 |
(i) | a relevant share option granted to A under B’s |
| |
employee share scheme as mentioned in subsection |
| |
(1)(a) in relation to which the requirements of |
| |
subsection (1)(b) to (e) are met (subject to subsection |
| |
| 50 |
|
| |
|
| |
|
(ii) | a relevant share option which is expected to be |
| |
granted to A under B’s employee share scheme as |
| |
mentioned in subsection (1)(a) and in relation to |
| |
which the requirements of subsection (1)(b) to (e) |
| |
would be met (subject to subsection (2)), |
| 5 |
(b) | the number of relevant shares of any type which are |
| |
earmarked shares does not exceed the maximum number of |
| |
relevant shares of that type which might reasonably be |
| |
expected to be needed for providing shares, or paying a sum |
| |
of money, pursuant to the relevant share option which is |
| 10 |
granted or expected to be granted, and |
| |
(c) | there is no connection (direct or indirect) between the |
| |
relevant step and a tax avoidance arrangement. |
| |
(5) | If the relevant step mentioned in subsection (4) is taken in relation to |
| |
an expected grant of a relevant share option as mentioned in |
| 15 |
subsection (4)(a)(ii), subsection (6) applies if— |
| |
(a) | the grant is not made before the end of the date (“the final |
| |
grant date”) which is three months after the date on which P |
| |
takes the relevant step, and |
| |
(b) | as at the final grant date, any of the earmarked shares |
| 20 |
continue to be held by or on behalf of P solely on the basis |
| |
mentioned in subsection (4)(a). |
| |
(6) | This Part has effect as if a relevant step within section 554B were |
| |
taken at the end of the final grant date— |
| |
(a) | the subject of which is— |
| 25 |
(i) | the shares which continue to be held as mentioned in |
| |
| |
(ii) | any relevant income in relation to those shares (see |
| |
| |
(b) | by reason of which Chapter 2 is to apply (subject only to |
| 30 |
| |
(7) | Subsection (8) applies if, at any time (“the relevant time”)— |
| |
(a) | any of the earmarked shares cease to be held by or on behalf |
| |
of P solely on the basis mentioned in subsection (4)(a), but |
| |
(b) | the shares continue to be held by or on behalf of P on the basis |
| 35 |
mentioned in section 554B(1)(a) or (b). |
| |
(8) | This Part has effect as if a relevant step within section 554B were |
| |
taken at the relevant time— |
| |
(a) | the subject of which is— |
| |
(i) | the shares mentioned in subsection (7), and |
| 40 |
(ii) | any relevant income in relation to those shares (see |
| |
| |
(b) | by reason of which Chapter 2 is to apply (subject only to |
| |
| |
(9) | Subsection (10) applies if— |
| 45 |
(a) | the relevant step mentioned in subsection (4) is taken in |
| |
relation to a grant of a relevant share option made as |
| |
mentioned in subsection (4)(a)(i), or |
| |
|
| |
|
| |
|
(b) | the relevant step mentioned in subsection (4) is taken in |
| |
relation to an expected grant of a relevant share option as |
| |
mentioned in subsection (4)(a)(ii) and the grant is made |
| |
before the final grant date. |
| |
(10) | This Part has effect as if a relevant step within section 554B were |
| 5 |
taken at the end of the final exercise date— |
| |
(a) | the subject of which is— |
| |
(i) | any of the earmarked shares to which none of |
| |
subsections (11) to (14) applies, and |
| |
(ii) | any relevant income in relation to any of the |
| 10 |
earmarked shares mentioned in sub-paragraph (i) |
| |
(see subsection (16)), and |
| |
(b) | by reason of which Chapter 2 is to apply (subject only to |
| |
| |
(11) | This subsection applies to any earmarked shares if— |
| 15 |
(a) | the relevant share option becomes exercisable (in whole or in |
| |
part) by A before the end of the vesting date, |
| |
(b) | A exercises the option (wholly or partly) before the end of the |
| |
final exercise date and, as a result, receives the shares, and |
| |
(c) | the receipt of the shares gives rise to employment income of |
| 20 |
A which is chargeable to income tax or which is exempt |
| |
| |
(12) | This subsection applies to any earmarked shares if— |
| |
(a) | the relevant share option becomes exercisable (in whole or in |
| |
part) by A before the end of the vesting date, |
| 25 |
(b) | A exercises the option (wholly or partly) before the end of the |
| |
final exercise date and, as a result, a sum of money is paid to |
| |
A as mentioned in subsection (1)(a)(ii), |
| |
(c) | the payment of the sum gives rise to employment income of |
| |
A which is chargeable to income tax or which is exempt |
| 30 |
| |
(d) | the payment represents the proceeds of the disposal of the |
| |
shares or, if the payment is made from another source, |
| |
correspondingly, no further relevant step is or will be taken |
| |
by P or any other person in relation to the shares or to any |
| 35 |
sum of money or asset which (directly or indirectly) may |
| |
arise or derive, or has arisen or derived, from the shares. |
| |
(13) | This subsection applies to any earmarked shares if— |
| |
(a) | in accordance with the deferred grant terms, before the end |
| |
of the vesting date, the relevant share option ceases to be |
| 40 |
exercisable by A (in whole or in part), and |
| |
(b) | correspondingly, no further relevant step is or will be taken |
| |
by P or any other person in relation to the shares or to any |
| |
sum of money or asset which (directly or indirectly) may |
| |
arise or derive, or has arisen or derived, from the shares. |
| 45 |
(14) | This subsection applies to any earmarked shares if— |
| |
(a) | the relevant share option becomes exercisable by A (in whole |
| |
or in part) before the end of the vesting date but the option |
| |
|
| |
|