Modifications etc. (not altering text)
C1Sch. 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))
C2Sch. 9 modified (29.4.1996) by Finance Act 1996 (c. 8), s. 115
C3Sch. 9 modified (29.4.1996) by Finance Act 1996 (c. 8), s. 116(3)
C4Sch. 9 modified (28.7.2000) by Finance Act 2000 (c. 17), s. 49(1)(2)
C5Sch. 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)
16(1)M1The scheme must provide for the scheme shares to be paid for with moneys not exceeding the amount of repayments made and any interest paid to them under a certified contractual savings scheme which has been approved by the Board for the purposes of this Schedule.
(2)M2Where the Board are satisfied that—
(a)a person has entered into a certified contractual savings scheme before 15th November 1980, and
(b)he has obtained rights under a scheme established before that date to acquire shares in a company of which he is an employee or director (or a company of which such a company has control) using repayments made under the certified contractual savings scheme;
then, repayments and interest paid under the certified contractual savings scheme shall be treated as repayments and interest paid, under a scheme approved by the Board for the purposes of this Schedule under sub-paragraph (1) above, and, accordingly, may be used for the purchase of shares under a savings-related share option scheme approved under this Schedule.
(3)The repayments and interest to which sub-paragraph (2) above applies shall not exceed the repayments and interest to which the participant would have been entitled if the terms of the scheme had corresponded to those of a certified contractual savings scheme approved by the Board under sub-paragraph (1) above.
17M3Subject to paragraphs 18 to 21 below, the rights obtained under the scheme must not be capable of being exercised before the bonus date, that is to say, the date on which repayments under the certified contractual savings scheme are due; and for the purposes of this paragraph and paragraph 16 above—
(a)repayments under a certified contractual savings scheme may be taken as including or as not including a bonus;
(b)the time when repayments are due shall be, where repayments are taken as including the maximum bonus, the earliest date on which the maximum bonus is payable and, in any other case, the earliest date on which a bonus is payable under the scheme; and
(c)the question what is to be taken as so included must be required to be determined at the time when rights under the scheme are obtained.
Marginal Citations
M3Source—1980 Sch.10 6
18M4The scheme must provide that if a person who has obtained rights under the scheme dies before the bonus date the rights must be exercised, if at all, within 12 months after the date of his death and if he dies within six months after the bonus date the rights may be exercised within 12 months after the bonus date.
Marginal Citations
M4Source—1980 Sch.10 7
19M5The scheme must provide that if a person who has obtained rights under it ceases to hold the office or employment by virtue of which he is eligible to participate in the scheme by reason of—
(a)injury or disability or redundancy within the meaning of [F1the Employment Rights Act 1996]; or
(b)retirement on reaching [F2the specified age] or any other age at which he is bound to retire in accordance with the terms of his contract of employment,
then the rights must be exercised, if at all, within six months of his so ceasing and, if he so ceases for any other reason within three years of obtaining the rights, they may not be exercised at all except pursuant to such a provision of the scheme as is mentioned in paragraph 21(1)(e) below; and in relation to the case where he so ceases for any other reason more than three years after obtaining the rights the scheme must either provide that the rights may not be exercised or that they must be exercised, if at all, within six months of his so ceasing.
Textual Amendments
F1Words in Sch. 9 para. 19(a) substituted (22.8.1996) by Employment Rights Act 1996 (c. 18), s. 243, Sch. 1 para. 35(4)(a)
F2Words in Sch. 9 para. 19(b) substituted by Finance Act 1991 (c. 31, SIF 63:1), s. 38(2)(6)
Marginal Citations
M5Source—1980 Sch.10 8; 1986 s.23(3)
20M6The scheme must provide that where a person who has obtained rights under it continues to hold the office or employment by virtue of which he is eligible to participate in the scheme after the date on which he reaches [F3the specified age], he may exercise the rights within six months of that date.
Textual Amendments
F3Words in Sch. 9 para. 20 substituted by Finance Act 1991 (c. 31, SIF 63:1), s. 38(2)(6)
Marginal Citations
M6Source—1980 Sch.10 9
21(1)M7The scheme may provide that—
(a)if any person obtains control of a company whose shares are scheme shares as a result of making a general offer falling within paragraph 15(a)(i) or (ii) above, rights obtained under the scheme to acquire shares in the company may be exercised within six months of the time when the person making the offer has obtained control of the company and any condition subject to which the offer is made has been satisfied;
(b)if under section 425 of the M8Companies Act 1985 or Article 418 of the M9Companies (Northern Ireland) Order 1986 (power to compromise with creditors and members) the court sanctions a compromise or arrangement proposed for the purposes of or in connection with a scheme for the reconstruction of a company whose shares are scheme shares or its amalgamation with any other company or companies, rights obtained under the share option scheme to acquire shares in the company may be exercised within six months of the court sanctioning the compromise or arrangement;
(c)if any person becomes bound or entitled, under sections 428 to 430 of that Act of 1985 or Articles 421 to 423 of that Order of 1986 (power to acquire shares of shareholders dissenting from schemes or contract approved by majority), to acquire shares in a company shares in which are scheme shares, rights obtained under the scheme to acquire shares in the company may be exercised at any time when that person remains so bound or entitled;
(d)if a company whose shares are scheme shares passes a resolution for voluntary winding up, rights obtained under a scheme to acquire shares in the company may be exercised within six months of the passing of the resolution; F4. . .
(e)if a person ceases to hold an office or employment by virtue of which he is eligible to participate in the scheme by reason only that—
(i)that office or employment is in a company of which the grantor ceases to have control; or
(ii)that office or employment relates to a business or part of a business which is transferred to a person who is neither an associated company of the grantor nor a company of which the grantor has control;
rights under the scheme held by that person may be exercised within six months of his so ceasing; [F5and
(f)if, at the bonus date, a person who has obtained rights under the scheme holds an office or employment in a company which is not a participating company but which is—
(i)an associated company of the grantor, or
(ii)a company of which the grantor has control,
those rights may be exercised within six months of that date.]
(2)For the purposes of this paragraph a person shall be deemed to have obtained control of a company if he and others acting in concert with him have together obtained control of it.
(3)Where a scheme which has been approved before 1st August 1986 has been or is altered before 1st August 1988 so as to include such a provision as is specified in sub-paragraph (1)(e) above, the scheme as altered may by virtue of this sub-paragraph apply that provision to rights obtained under the scheme before the date on which the alteration takes effect, and where that provision is so applied in relation to such rights—
(a)the scheme may permit a person having such rights to take advantage of the provision notwithstanding that under the scheme he would otherwise be unable to exercise those rights after he has ceased to hold the office or employment in question; and
(b)if, before the date on which the alteration takes effect, a person who held such rights on 18th March 1986 ceases, in either of the circumstances set out in sub-paragraph (1)(e) above, to hold an office or employment by virtue of which he was eligible to participate in the scheme, then, so far as concerns the rights so held, the scheme may permit him to take advantage of the provision in question as if the alteration had been made immediately before he ceased to hold that office or employment; and
(c)the application of the provision shall not itself be regarded as the acquisition of a right for the purposes of this Schedule.
This sub-paragraph has effect subject to paragraph 4 above.
[F6(4)Where a scheme approved before the date of the passing of the Finance Act 1996 is altered before 5th May 1998 so as to include such a provision as is specified in sub-paragraph (1)(f) above, the scheme may apply the provision to rights obtained under the scheme before the alteration takes effect, whether the bonus date in relation to the rights occurred before or after the passing of that Act; and where the provision is applied to such rights by virtue of this sub-paragraph, its application to such rights shall not itself be regarded as the acquisition of a right for the purposes of this Schedule.
This sub-paragraph has effect subject to paragraph 4 above.]
Textual Amendments
F4Word in Sch. 9 para. 21(1) repealed (29.4.1996) by Finance Act 1996 (c. 8), s. 113(1), Sch. 41 Pt. 5(5), Note 2
F5Sch. 9 para. 21(1)(f) and preceding word inserted (29.4.1996) by Finance Act 1996 (c. 8), s. 113(1)
F6Sch. 9 para. 21(4) inserted (29.4.1996) by Finance Act 1996 (c. 8), s. 113(2)
Marginal Citations
M7Source—1980 Sch.10 10; 1986 s.25(4), (8), (9)
22M10Except as provided in paragraph 18 above, rights obtained by a person under the scheme must not be capable—
(a)of being transferred by him, or
(b)of being exercised later than six months after the bonus date.
Marginal Citations
M10Source—1980 Sch.10 11
23M11No person shall be treated for the purposes of paragraph 19 or 21(1)(e) above as ceasing to hold an office or employment by virtue of which he is eligible to participate in the scheme until he ceases to hold an office or employment in the grantor or in any associated company or company of which the grantor has control.
Marginal Citations
M11Source—1980 Sch.10 12; 1986 s.25(5)
24(1)M12The scheme must provide for a person’s contributions under the certified contractual savings scheme to be of such amount as to secure as nearly as may be repayment of an amount equal to that for which shares may be acquired in pursuance of rights obtained under the scheme; and for this purpose the amount of repayment under the certified contractual savings scheme shall be determined as mentioned in paragraph 17 above.
(2)M13The scheme must not—
(a)permit the aggregate amount of a person’s contributions under certified contractual savings schemes linked to savings-related share option schemes approved under this Schedule to exceed [F7£250] monthly, nor
(b)impose a minimum on the amount of a person’s contributions which exceeds £10 monthly.
(3)The Treasury may by order amend sub-paragraph (2) above by substituting for any amount for the time being specified in that sub-paragraph such amount as may be specified in the order.
Textual Amendments
F7Figure in Sch. 9 para. 24(2)(a) substituted (01.09.1991) by virtue of Finance Act 1991 (c. 31, SIF 63:1), s. 40(1); S.I. 1991/1741, art.2.
Marginal Citations
M12Source—1980 Sch.10 13(1)
M13Source—1980 Sch.10 13(2), (3); 1984 s.39(5)
25M14The price at which scheme shares may be acquired by the exercise of a right obtained under the scheme—
(a)must be stated at the time the right is obtained, and
(b)must not be manifestly less than [F880%.] of the market value of shares of the same class at that time or, if the Board and the grantor agree in writing, at such earlier time or times as may be provided in the agreement,
but the scheme may provide for such variation of the price as may be necessary to take account of any variation in the share capital of which the scheme shares form part.
Textual Amendments
F81989 s.62(3).Previously
“90 per cent.”.
Marginal Citations
M14Source—1980 Sch.10 14
26(1)M15Subject to paragraph 8 above, every person who—
(a)is [F9an employee] or a full-time director of the grantor or, in the case of a group scheme, a participating company, and
(b)has been such an employee or director at all times during a qualifying period not exceeding five years, and
(c)is chargeable to tax in respect of his office or employment under Case I of Schedule E,
must be eligible to participate in the scheme, that is to say, to obtain and exercise rights under it, on similar terms, and those who do participate in the scheme must actually do so on similar terms.
(2)For the purposes of sub-paragraph (1) above, the fact that the rights to be obtained by the persons participating in a scheme vary according to the levels of their remuneration, the length of their service or similar factors shall not be regarded as meaning that they are not eligible to participate in the scheme on similar terms or do not actually do so.
(3)M16Except as provided by paragraph 19 above or pursuant to such a provision as is referred to in paragraph 21(1)(e) [F10or (f)] above, a person must not be eligible to participate in the scheme at any time unless he is at that time a director or employee of the grantor or, in the case of a group scheme, of a participating company.
Textual Amendments
F9Words in Sch. 9 para. 26(1)(a) substituted (with effect in accordance with s. 137(7) of the amending Act) by Finance Act 1995 (c. 4), s. 137(2)
F10Words in Sch. 9 para. 26(3) inserted (29.4.1996) by Finance Act 1996 (c. 8), s. 113(3)
Marginal Citations
M15Source—1980 Sch.10 20; 1984 s.39(6); 1986 s.25(7)
M16Source—1980 Sch.10 21; 1986 s.25(6)