Income Tax (Earnings and Pensions) Act 2003 (c. 1)

SCHEDULES

SCHEDULE 3 U.K. F1 ... SAYE option schemes

Textual Amendments

F1 Word in Sch. 3 title omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 103, 146 (with Sch. 8 paras. 147-157)

Part 4 U.K. Shares to which schemes can apply

Requirements relating to shares that may be subject to share options: introduction U.K.

17 (1) An SAYE option scheme must meet the requirements of— U.K.

• paragraph 18 (shares must be ordinary shares of certain companies),

• paragraph 19 (requirements as to listing),

• paragraph 20 (shares must be fully paid up and not redeemable), [F2 and]

• F3 ...

• paragraph 22 (requirements as to other shareholdings).

[F4 (1A) Sub-paragraph (1) and the other paragraphs of this Part are subject to paragraph 37(6B).]

(2) In this Part “eligible shares” means shares which may be acquired by the exercise of share options under the scheme.

Textual Amendments

F2 Word in Sch. 3 para. 17(1) inserted (with effect in accordance with Sch. 2 para. 67 of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 60(a)

F3 Words in Sch. 3 para. 17(1) omitted (with effect in accordance with Sch. 2 para. 67 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 60(b)

F4 Sch. 3 para. 17(1A) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 109, 146 (with Sch. 8 paras. 147-157)

Shares must be ordinary shares of certain companies U.K.

18 U.K. Eligible shares must form part of the ordinary share capital of—

(a) the scheme organiser,

(b) a company which has control of the scheme organiser, or

(c) a company which either is, or has control of, a company which is a member of a consortium owning either the scheme organiser or a company having control of the scheme organiser.

Requirements as to listing U.K.

19 (1) Eligible shares must be— U.K.

(a) shares of a class listed on a recognised stock exchange,

(b) shares in a company which is not under the control of another company, F5 ...

[F6 (ba) shares in a company which is subject to an employee-ownership trust (within the meaning of paragraph 27(4) to (6) of Schedule 2), or]

(c) shares in a company which is under the control of a listed company.

(2) A “listed company” is a company whose shares are listed on a recognised stock exchange, other than—

(a) a close company, or

(b) a company that would be a close company if resident in the United Kingdom.

[F7 (3) But a company is not a close company for the purposes of sub-paragraph (2) if it is subject to an employee-ownership trust (within the meaning of paragraph 27(4) to (6) of Schedule 2).]

Textual Amendments

F5 Word in Sch. 3 para. 19(1)(b) omitted (1.10.2014) by virtue of Finance Act 2014 (c. 26), Sch. 37 para. 20(2)(4)

F6 Sch. 3 para. 19(1)(ba) inserted (1.10.2014) by Finance Act 2014 (c. 26), Sch. 37 para. 20(2)(4)

F7 Sch. 3 para. 19(3) inserted (1.10.2014) by Finance Act 2014 (c. 26), Sch. 37 para. 20(3)(4)

Shares must be fully paid up and not redeemable U.K.

20 U.K. Eligible shares must be—

(a) fully paid up, and

(b) not redeemable.

Only certain kinds of restriction allowed U.K.

F8 21 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F8 Sch. 3 para. 21 omitted (with effect in accordance with Sch. 2 para. 67 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 61

Requirements as to other shareholdings U.K.

22 (1) The majority of the issued shares of the same class as the eligible shares must be— U.K.

(a) employee-control shares, or

(b) open market shares,

unless the eligible shares are shares in a company whose ordinary share capital consists of shares of one class only.

(2) Shares in a company are “employee-control shares” if—

(a) the persons holding the shares are, by virtue of their holding, together able to control the company, and

(b) those persons are or have been employees or directors of the company or of another company which is under the control of the company.

(3) Shares in a company are “open market shares” if the persons holding the shares are not—

(a) persons who acquired their shares as a result of a right conferred on them or an opportunity afforded to them as a director or employee of the scheme organiser or any other company, and not as a result of an offer to the public, or

(b) trustees holding shares on behalf of persons who acquired their beneficial interests in the shares as mentioned in paragraph (a), or

(c) in the case of shares which—

(i) are not of a class listed on a recognised stock exchange, and

(ii) are in a company which is under the control of a listed company (as defined by paragraph 19(2)),

companies which have control of the company whose shares are in question or of which that company is an associated company.