SCHEDULES
C2C3C4C5C6SCHEDULE 9 APPROVED SHARE OPTION SCHEMES AND PROFIT SHARING SCHEMES
Sch. 9 modified (29.4.1996) by Finance Act 1996 (c. 8), s. 115
Sch. 9 modified (29.4.1996) by Finance Act 1996 (c. 8), s. 116(3)
Sch. 9 modified (28.7.2000) by Finance Act 2000 (c. 17), s. 49(1)(2)
Sch. 9 continued for specified purposes (6.4.2003 with effect in accordance with s. 723(1) of the affecting Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 418(3) (with Sch. 7)
PART I GENERAL
F22
1
M1The Board shall not approve a scheme under this Schedule if it appears to them that it contains features which are neither essential nor reasonably incidental to the purpose of providing for employees and directors benefits in the nature of rights to acquire shares or, in the case of a profit sharing scheme, in the nature of interests in shares.
C12
M2A profit sharing scheme shall not be approved under paragraph 1 above unless the Board are satisfied that, whether under the terms of the scheme or otherwise, every participant in the scheme is bound in contract with the grantor—
a
to permit his shares to remain in the hands of the trustees throughout the period of retention; and
b
not to assign, charge or otherwise dispose of his beneficial interest in his shares during that period; and
c
if he directs the trustees to transfer the ownership of his shares to him at any time before the release date, to pay to the trustees before the transfer takes place a sum equal to income tax at the basic rate on the appropriate percentage of the locked-in value of the shares at the time of the direction; and
d
not to direct the trustees to dispose of his shares at any time before the release date in any other way except by sale for the best consideration in money that can reasonably be obtained at the time of the sale or, in the case of redeemable shares in a workers’ cooperative, by redemption.
F12A
The Board shall not approve a profit sharing scheme unless they are satisfied—
a
that the arrangements for the scheme do not make any provision, and are not in any way associated with any provision made, for loans to some or all of the employees of—
i
the company that established the scheme, or
ii
in the case of a group scheme, any participating company, and
b
that the operation of the scheme is not in any way associated with such loans.
2B
For the purposes of sub-paragraph (2A) above “arrangements” includes any scheme, agreement or understanding, whether or not legally enforceable.
3
M3The Board must be satisfied in the case of a savings-related share option scheme or a profit sharing scheme—
a
that there are no features of the scheme (other than any which are included to satisfy requirements of this Schedule) which have or would have the effect of discouraging any description of employees or former employees who fulfil the conditions in paragraph 26(1) or, as the case may be, 36(1) below from actually participating in the scheme; and
b
where the grantor is a member of a group of companies, that the scheme does not and would not have the effect of conferring benefits wholly or mainly on directors of companies in the group or on those employees of companies in the group who are in receipt of the higher or highest levels of remuneration.
4
For the purposes of sub-paragraph (3) above “a group of companies” means a company and any other companies of which it has control.
Sch. 9 excluded (6.3.1992 with effect as mentioned in s. 289(1)(2) of the amending Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 238(2)(c)(4), 289 (with ss. 60, 101(1), 171, 201(3))