SCHEDULES

SCHEDULE 2Approved share incentive plans

Part 11Supplementary provisions

Company reconstructions

86

1

In this Part of this Schedule a “company reconstruction” means a transaction to which this paragraph applies.

2

This paragraph applies to a transaction which occurs in relation to any of a participant’s plan shares (“the original holding”) and—

a

results in a new holding being equated with the original holding for the purposes of capital gains tax, or

b

would have that result but for the fact that what would be the new holding consists of or includes a qualifying corporate bond.

3

But where an excluded issue of shares is made—

a

that issue of shares does not by itself count as a transaction within sub-paragraph (2); and

b

if made as part of a transaction within that sub-paragraph (that is, as part of a company reconstruction), the shares issued are to be regarded as not forming part of the new holding.

4

An “excluded issue of shares” means an issue of shares of any of the following descriptions (in respect of which a charge to income tax arises)—

a

redeemable shares or securities issued as mentioned in section 209(2)(c) of ICTA (distributions);

b

share capital issued in circumstances such that section 210(1) of ICTA (bonus issues) applies;

c

share capital to which section 249 of ICTA (stock dividends) applies F1that is issued in a case where section 410(2) or (3) of ITTOIA 2005 applies .