(1)Schedule 9 to the Taxes Act 1988 (share option schemes and profit sharing schemes) is amended in accordance with subsections (2) to (4).
(2)In paragraph 9(1) (requirements to be satisfied by shares in share option schemes), after “below" insert “ (disregarding paragraph 11A) ”.
(3)After paragraph 11 (requirements as to listing etc.) insert—
“11A(1)In the case of a profit sharing scheme, scheme shares must not be shares—
(a)in an employer company, or
(b)in a company that—
(i)has control of an employer company, and
(ii)is under the control of a person or persons within sub-paragraph (2)(b)(i) below in relation to an employer company.
(2)For the purposes of this paragraph a company is “an employer company” if—
(a)the business carried on by it consists substantially in the provision of the services of the persons employed by it, and
(b)the majority of those services are provided to—
(i)a person who has, or two or more persons who together have, control of the company, or
(ii)a company associated with the company.
(3)For the purposes of sub-paragraph (2)(b)(ii) above a company shall be treated as associated with another company if both companies are under the control of the same person or persons.
(4)For the purposes of sub-paragraphs (1) to (3) above—
(a)references to a person include a partnership, and
(b)where a partner, alone or together with others, has control of a company, the partnership shall be treated as having like control of that company.
(5)For the purposes of this paragraph the question whether a person controls a company shall be determined in accordance with section 416(2) to (6).”.
(4)In paragraph 12—
(a)in sub-paragraph (1), in paragraph (c) for “other than" to the end of that paragraph there shall be substituted “ other than those permitted by sub-paragraph (1A) below. ”, and
(b)after sub-paragraph (1) insert—
“(1A)Subject to sub-paragraph (1B) below, scheme shares may be subject to—
(a)restrictions which attach to all shares of the same class, or
(b)a restriction authorised by sub-paragraph (2) below.
(1B)In the case of a profit sharing scheme, scheme shares must not be subject to any restrictions affecting the rights attaching to those shares which relate to—
(a)dividends, or
(b)assets on a winding-up of the company,
other than restrictions which attach to all other ordinary shares in the same company.”.
(5)Subsections (1) to (4) shall be deemed to have come into force on 21st March 2000.
(6)Subsections (3) and (4) do not have effect in relation to shares acquired before 21st March 2000 by the trustees of a profit sharing scheme approved under Schedule 9 to the Taxes Act 1988.
Commencement Information
I1S. 52(1)-(4) deemed to have come into force at 21.3.2000 see s. 52(5)