SCHEDULES

SCHEDULE 2Approved share incentive plans

Part 9Trustees

Meeting by trustees of PAYE obligations

79

1

The plan must make provision to ensure that, where a PAYE obligation is imposed on the trustees as a result of any of a participant’s plan shares ceasing to be subject to the plan, the trustees are able to meet that obligation—

a

by disposing of any of those shares, or

b

if there are any remaining plan shares of the participant, by disposing of any of those shares, or

c

by the participant paying to the trustees a sum equal to the amount required to discharge the obligation.

2

A “PAYE obligation” includes an obligation under any of sections 510 to 512 (PAYE: shares ceasing to be subject to the plan).

3

For the purposes of sub-paragraph (1) any reference to the trustees disposing of shares includes a reference to their acquiring the shares as trustees for the purposes of the trust.

4

A disposal of any of the participant’s plan shares in accordance with provision made under sub-paragraph (1)(b) may give rise to a charge to tax under—

  • section 505 (charge on free or matching shares ceasing to be subject to plan),

  • section 506 (charge on partnership shares ceasing to be subject to plan), or

  • section 68B(2) or 251C(1) of ICTA (charge under Case V of Schedule D or Schedule F on dividend shares ceasing to be subject to plan).