Income Tax (Earnings and Pensions) Act 2003 (c. 1)

SCHEDULES

SCHEDULE 5 U.K. Enterprise management incentives

Part 8 U.K. Supplementary provisions

Power to require information U.K.

51 (1) [F1 An officer of Revenue and Customs] may by notice require a person to provide [F2 the officer] with information— U.K.

(a) which [F2 the officer] reasonably [F3 requires] for the performance of [F4 the officer's] functions under the EMI code, and

(b) which the person to whom the notice is addressed has or can reasonably obtain.

(2) The power conferred by this paragraph extends, in particular, to information to enable [F1 an officer of Revenue and Customs] —

(a) to decide whether a share option is a qualifying option, or

(b) to determine the liability to tax, including capital gains tax, of any person who has been granted a qualifying option.

(3) The notice must require the information to be provided within a specified period, which must not end earlier than 3 months after the date when the notice is given.

Textual Amendments

F1 Words in Act substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 102(1); S.I. 2005/1126, art. 2(2)(h)

F2 Words in Sch. 5 para. 51(1) substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 103(1)(aa); S.I. 2005/1126, art. 2(2)(h)

F3 Word in Sch. 5 para. 51(1) substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 124(e); S.I. 2005/1126, art. 2(2)(h)

F4 Words in Sch. 5 para. 51(1) substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 103(2)(m); S.I. 2005/1126, art. 2(2)(h)

Annual returns U.K.

52 (1) A company whose shares are subject to a qualifying option at any time during a tax year must deliver a return to [F1 an officer of Revenue and Customs]. U.K.

(2) The return must—

(a) contain such information as [F1 an officer of Revenue and Customs] may require, and

(b) be made before 7th July in the tax year following that to which it relates.

Textual Amendments

F1 Words in Act substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 102(1); S.I. 2005/1126, art. 2(2)(h)

Compliance with time limits U.K.

53 (1) For the purposes of this Part and Part 7 a person is not to be regarded as having failed to do anything required to be done within a particular period of time if— U.K.

(a) the person had a reasonable excuse for not doing it within that period, and

(b) if the excuse ceased to exist, the person did it without unreasonable delay after the excuse ceased to exist.

(2) Where sub-paragraph (1)(b) applies, any further time limit running from the end of the period concerned is instead to run from the time when the thing in question was actually done.

Power to amend by Treasury order U.K.

54 (1) The Treasury may by order amend the EMI code— U.K.

(a) to make such amendments of paragraphs 13 to 23 (the trading activities requirement and related provisions) as they consider expedient;

(b) to substitute different sums of money for those for the time being specified in—

(i) paragraphs 5(1) and 6(1) and (3) (maximum entitlement of employee);

(ii) paragraph 12(1) and (2) (the gross assets requirement).

(2) An order under sub-paragraph (1)(b) which amends paragraphs 5(1) and 6(1) and (3) may amend section 536(1)(e) (other disqualifying events) so as to substitute the same sum for the one that is for the time being specified there.

Meaning of “market value” of shares U.K.

55 (1) For the purposes of the EMI code the “market value” of shares has the same meaning as it has for the purposes of TCGA 1992 by virtue of Part 8 of that Act. U.K.

(2) Sub-paragraph (1) is subject to paragraph 5(7) (valuation of shares subject to restriction or risk of forfeiture) as it applies for the purposes of any provision of the EMI code.

Determination of market value of shares U.K.

56 (1) This paragraph applies to the determination of the market value of shares for the purposes of the EMI code. U.K.

(2) Unless—

(a) it is agreed between the employer company and [F1 an officer of Revenue and Customs], or

(b) a reference is made under sub-paragraph (4),

the market value of shares is to be determined by [F1 an officer of Revenue and Customs].

(3) Where the market value of shares on any date needs to be determined for the purposes of the EMI code, [F1 an officer of Revenue and Customs] and the employer company may agree that it is to be determined by reference to a date or dates, or to the average of the values on a number of dates, stated in the agreement.

(4) At any time before notice of [F1 an officer of Revenue and Customs] determination has been given to the employer company, [F5 the company may apply to the tribunal for the question of the market value of the shares to be determined].

F6 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F7 (6) Any such application is to be subject to the relevant provisions of Part 5 of TMA 1970 (see, in particular, section 48(2)(b) of that Act).]

Textual Amendments

F1 Words in Act substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 102(1); S.I. 2005/1126, art. 2(2)(h)

F5 Words in Sch. 5 para. 56(4) substituted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 355(2)

F6 Sch. 5 para. 56(5) omitted (1.4.2009) by virtue of The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 355(3)

F7 Sch. 5 para. 56(6) substituted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 355(4)

Appeal against determination of market value of shares U.K.

57 (1) The employer company may appeal against any determination by [F1 an officer of Revenue and Customs] under paragraph 56. U.K.

(2) Notice of appeal must be given to [F1 an officer of Revenue and Customs] within 30 days after the date when notice of their determination is given to the employer company.

F8 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1 Words in Act substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 102(1); S.I. 2005/1126, art. 2(2)(h)

F8 Sch. 5 para. 57(3) omitted (1.4.2009) by virtue of The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 356

Minor definitions U.K.

58 U.K. In the EMI code—

• “arrangements” includes any scheme, agreement or understanding, whether it is legally enforceable or not;

• “company” means a body corporate;

• “group of companies” means a parent company and its 51% subsidiaries;

• “the group”, in relation to a parent company, means that company and its 51% subsidiaries;

• “parent company” means a company that has one or more 51% subsidiaries and “single company” means a company that does not;

• “research and development” has the meaning given by [F9 section 1006 of ITA 2007];

• “shares” includes stock.

Textual Amendments

F9 Words in Sch. 5 para. 58 substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 450(3) (with Sch. 2)

Index of defined expressions U.K.

59 U.K. In the EMI code the following expressions are defined or otherwise explained by the provisions indicated below:

the appropriate time	paragraph 1(4)
arrangements	paragraph 58(1)
child	[F10 section 721(6)]
close company	[F11 section 989 of ITA 2007], (and see paragraph 29(4))
closure notice	paragraph 47(4)
company	paragraph 58
company reorganisation (in Part 6 of this Schedule)	paragraph 39(2)
connected person	section 718
control	section 719 (and see paragraphs 10(2) and 23(6))
disqualifying event	see sections 532 to 539
distribution	[F12 section 989 of ITA 2007]
earnings	section 62 and see section 721(7)
the EMI code	section 527(3)
employee and employment	section 4
eligible employee	paragraph 24
employer company	paragraph 2
excluded activities	paragraph 16
farming	[F13 section 996 of ITA 2007]
F14 . . .	F14 . . .
generally accepted accounting practice	[F15 section 997 of ITA 2007]
group of companies	paragraph 58
the group	paragraph 58
F16 . . .	F16 ...
market value	paragraph 55 (and see paragraph 5(7))
met (in Part 7 of this Schedule)	paragraph 44(7)
new option	paragraph 41(7)
notice	[F17 section 989 of ITA 2007]
[F18 offshore installation]	[F19 sections 1001 and 1002 of ITA 2007]
old option	paragraph 41(7)
ordinary share capital	[F20 section 989 of ITA 2007]
original option	section 529(3)
parent company	paragraph 58
personal representative	[F21 section 989 of ITA 2007]
qualifying company	paragraph 8
qualifying option	section 527(4) (and see paragraph 41(5))
qualifying subsidiary	paragraph 11
qualifying trade	paragraph 15
relevant company	paragraph 2
replacement option	section 527(4)
the requirements of this Schedule	section 527(4)
research and development	paragraph 58
share option	section 527(4)
shares	paragraph 58 (and see paragraph 40(4)(a))
single company	paragraph 58
F22 . . .	F22 . . .
51% subsidiary	[F23 section 989 of ITA 2007]
tax	[F24 section 989 of ITA 2007]
tax year	[F25 section 4(2) of ITA 2007 (as applied by section 989 of that Act)]
trade	[F26 section 989 of ITA 2007]
[F27 tribunal	section 989 of ITA 2007]
United Kingdom	[F28 section 1013 of ITA 2007]

Textual Amendments

F10 Words in Sch. 5 para. 59 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 450(4)(a) (with Sch. 2)

F11 Words in Sch. 5 para. 59 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 450(4)(b) (with Sch. 2)

F12 Words in Sch. 5 para. 59 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 450(4)(c) (with Sch. 2)

F13 Words in Sch. 5 para. 59 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 450(4)(d) (with Sch. 2)

F14 Sch. 5 para. 59 Table entry omitted (1.4.2009) by virtue of The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 357(2)

F15 Words in Sch. 5 para. 59 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 450(4)(e) (with Sch. 2)

F16 Words in Sch. 5 para. 59 repealed (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 124(f), Sch. 5; S.I. 2005/1126, art. 2(2)(h)(i)

F17 Words in Sch. 5 para. 59 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 450(4)(f) (with Sch. 2)

F18 Words in Sch. 5 para. 59 inserted (with effect in accordance with Sch. 27 para. 17(6)(7) of the amending Act) by Finance Act 2004 (c. 12), Sch. 27 para. 17(5)

F19 Words in Sch. 5 para. 59 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 450(4)(g) (with Sch. 2)

F20 Words in Sch. 5 para. 59 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 450(4)(h) (with Sch. 2)

F21 Words in Sch. 5 para. 59 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 450(4)(i) (with Sch. 2)

F22 Sch. 5 para. 59 Table entry omitted (1.4.2009) by virtue of The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 357(3)

F23 Words in Sch. 5 para. 59 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 450(4)(j) (with Sch. 2)

F24 Words in Sch. 5 para. 59 substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 399(6) (with Sch. 2)

F25 Words in Sch. 5 para. 59 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 450(4)(l) (with Sch. 2)

F26 Words in Sch. 5 para. 59 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 450(4)(m) (with Sch. 2)

F27 Words in Sch. 5 para. 59 Table inserted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 357(4)

F28 Words in Sch. 5 para. 59 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 450(4)(n) (with Sch. 2)