Part 7F1Employment income: income and exemptions relating to securities

Annotations:
Amendments (Textual)
F1

Pt. 7 heading substituted (with effect in accordance with Sch. 22 para. 2(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 2(1)

Chapter 9Enterprise management incentives

Introduction

527Enterprise management incentives: qualifying options

1

This Chapter provides—

a

for share options notified to the Inland Revenue to be qualifying options for the purposes of the EMI code, and

b

for exemptions and reliefs from income tax in connection with qualifying options.

2

Schedule 5 contains the requirements that have to be met for a share option to be a qualifying option, together with the notification procedure.

3

The provisions of—

a

this and the following sections of this Chapter,

b

Schedule 5, and

c

Part 4 of Schedule 7D to TCGA 1992 (enterprise management incentives: capital gains tax consequences of exercise of qualifying option),

together constitute “the EMI code”.

4

In the EMI code—

  • “qualifying option” means a share option—

    1. a

      in relation to which the requirements of Schedule 5 are met at the time when the option is granted, and

    2. b

      which is notified to the Inland Revenue in accordance with Part 7 of that Schedule;

  • “replacement option” means an option within paragraph 41(4) of that Schedule (grant of replacement option in connection with company reorganisations);

  • “share option” means a right to acquire shares in a company;

  • and any reference to the requirements of Schedule 5 is to the requirements set out in paragraph 1(3) of that Schedule.

5

Other expressions used in the EMI code and contained in the index at the end of Schedule 5 have the meaning indicated by the index.