Textual Amendments
F1Pt. 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)
Modifications etc. (not altering text)
C1Pt. 7: power to modify conferred (7.4.2005) by Finance Act 2005 (c. 7), s. 21(8)-(10)
(1)This section applies if—
(a)there is a genuine offer to the public of a combination of shares in two or more companies at a fixed price or by tender (“the public offer”),
(b)there is at the same time an offer (“the employee offer”) of shares, or of a combination of shares, in one or more, but not all, of those companies—
(i)to directors or employees of any of those companies, or of any other company or person, or
(ii)to those directors or employees and to other persons,
(c)any of those directors or employees is entitled by reason of the office or employment to an allocation of shares under the employee offer in priority to any allocation to members of the public under the public offer, and
(d)conditions A to C are met.
(2)No liability to income tax in respect of earnings arises by virtue of any benefit derived by the director or employee from the entitlement.
(3)Condition A is that for each company whose shares are subject to the employee offer, the aggregate number of shares subject to that offer that may be allocated as mentioned in subsection (1)(c) (“priority shares”) does not exceed—
(a)if the public offer and the employee offer are part of arrangements which include one or more other offers to the public of shares in the company of the same class, either of the limits in subsection (4), or
(b)in any other case, 10% of the shares in the company that are subject to the public offer or the employee offer (including the priority shares).
(4)The limits referred to in subsection (3)(a) are—
(a)40% of the shares in the company that are subject to the public offer or the employee offer (including the priority shares), and
(b)10% of all the shares in the company of the class in question that are subject to any of the offers forming part of the arrangements (including the priority shares).
(5)Condition B is that all the persons entitled to an allocation of priority shares are entitled to it on similar terms (see section 546).
(6)Condition C is that those persons are not restricted wholly or mainly to directors or to those whose remuneration exceeds a particular level.
(7)This section has effect subject to section 545 (discount not covered by exemption in this section).