Income Tax (Earnings and Pensions) Act 2003

Part 2 U.K. General requirements F1 ...

Textual Amendments

F1 Words in Sch. 3 Pt. 2 title omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 106, 146 (with Sch. 8 paras. 147-157)

General requirements F2 ...: introduction U.K.

Textual Amendments

F2 Words in Sch. 3 para. 4 cross-heading omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 107, 146 (with Sch. 8 paras. 147-157)

4 U.K. An SAYE option scheme must meet the requirements of—

• paragraph 5 (general restriction on contents of scheme),

• paragraph 6 (all-employee nature of scheme),

• paragraph 7 (participation on similar terms), and

• paragraph 8 (no preferential treatment for directors and senior employees).

General restriction on contents of scheme U.K.

[F3 5 (1) The purpose of the scheme must be to provide, in accordance with this Schedule, benefits for employees and directors in the form of share options. U.K.

(2) The scheme must not provide benefits to employees or directors otherwise than in accordance with this Schedule.

(3) For example, the scheme must not provide cash as an alternative to share options or shares which might otherwise be acquired by the exercise of share options.]

Textual Amendments

F3 Sch. 3 para. 5 substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 108, 146 (with Sch. 8 paras. 147-157)

All-employee nature of scheme U.K.

6 (1) The scheme must provide that every person who meets the conditions in sub-paragraph (2) is eligible to participate in the scheme. U.K.

(2) A person (“E”) meets the conditions in this sub-paragraph if—

(a) E is an employee or a full-time director of the scheme organiser or (in the case of a group scheme) of a constituent company,

(b) E has been such an employee or director at all times during a qualifying period of not more than 5 years,

[F4 (c) E's earnings from the office or employment within paragraph (a) are (or would be if there were any) general earnings to which section 15 applies (earnings for year when employee UK resident), [F5 and]

F6 (ca) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

(d) E is not ineligible under paragraph 11 (the “no material interest” requirement).

(3) The scheme must not contain any feature which has or is likely to have the effect of discouraging any description of persons who—

(a) meet the conditions in sub-paragraph (2), or

(b) met those conditions before ceasing to be persons within sub-paragraph (2)(a),

from actually participating in the scheme.

(4) Sub-paragraph (3) does not apply to any provision required or authorised by a provision of this Schedule.

Textual Amendments

F4 Sch. 3 para. 6(2)(c)(ca) substituted for Sch. 3 para. 6(2)(c) (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 42

F5 Word in Sch. 3 para. 6(2)(c) inserted (with effect in accordance with Sch. 46 para. 72 of the amending Act) by Finance Act 2013 (c. 29), Sch. 46 para. 41(1)(a) (with Sch. 46 para. 41(2))

F6 Sch. 3 para. 6(2)(ca) omitted (with effect in accordance with Sch. 46 para. 72 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 46 para. 41(1)(b) (with Sch. 46 para. 41(2))

Participation on similar terms U.K.

7 (1) The requirements of this paragraph are— U.K.

(a) that every person who meets the conditions in paragraph 6(2) (all-employee nature of scheme) must be eligible to participate in the scheme on similar terms, and

(b) that every person who participates in the scheme must actually do so on similar terms.

(2) The requirements of this paragraph are not infringed by the fact that the rights of those participating in the scheme to obtain and exercise share options vary according to—

(a) the levels of their remuneration,

(b) the length of their service, or

(c) any similar factors.

No preferential treatment for directors and senior employees U.K.

8 (1) The requirement of this paragraph is that, if the scheme organiser is a member of a group of companies, the scheme does not and is not likely to have the effect of conferring benefits wholly or mainly— U.K.

(a) on directors of companies in the group, or

(b) on employees of companies in the group who receive the higher or highest levels of remuneration.

(2) “A group of companies” means a company and any other companies of which it has control.