488Approved share incentive plans (SIPs)U.K.
(1)This Chapter provides—
(a)for the approval of share incentive plans (“SIPs”) by the Inland Revenue,
(b)for exemptions from income tax in connection with shares obtained under those plans,
(c)for amounts to count as employment income in certain circumstances in connection with such plans, and
(d)for the making of PAYE deductions in connection with such amounts.
(2)Schedule 2 contains the requirements that have to be met for a SIP to be approved, together with—
(a)the approval procedure, and
(b)provisions relating to the administration and operation of a SIP.
(3)The provisions of—
(a)this and the following sections of this Chapter,
(b)Schedule 2, and
(c)the provisions mentioned in section 515 (tax advantages and charges under other Acts),
together constitute “the SIP code”.
(4)In the SIP code—
“approved” means approved by the Inland Revenue under Schedule 2, and “approval” has a corresponding meaning;
“PAYE deduction” means a deduction required by PAYE regulations;
a “” (or “SIP” for short) means a plan established by a company providing—
(a)for shares to be appropriated to employees without payment (“free shares”), or
(b)for shares to be acquired on behalf of employees out of sums deducted from their salary (“partnership shares”).
(5)Other expressions used in the SIP code and contained in the index at the end of Schedule 2 have the meaning indicated by the index.