Paragraph 43: Further requirements to be met as to replacement option
3540.This paragraph sets out various other conditions that must be met if the new option is to qualify as a replacement option for the purposes of EMI. This paragraph derives from paragraph 63 of Schedule 14 to FA 2000.
3541.As noted above, in relation to paragraphs 5 and 41 of this Schedule, the test in sub-paragraph (3)(b) (the maximum value of options under paragraph 7) should be applied to the new option and the acquiring company but the shares to be valued are those in the acquired company at the date of the grant of the old option. This is made clear in sub-paragraph (4). See Change 177 in Annex 1.