SCHEDULE 3 PAYMENTS TO BE DISREGARDED IN THE CALCULATION OF EARNINGS FOR THE PURPOSES OF EARNINGS-RELATED CONTRIBUTIONS

PART IX SHARE INCENTIVES

Assignment or release of option

15.

(1)

A payment by way of a gain realised by the assignment or release of a right (“the first right”) to acquire shares in a body corporate (“the relevant body corporate”) chargeable to tax under Schedule E by virtue of section 135 of the Taxes Act if—

(a)

sub-paragraph (2) is satisfied; and

(b)

sub-paragraph (3) does not apply.

(2)

This sub-paragraph is satisfied if a subsequent right forms all, or part, of the consideration given for the assignment or release of the first right.

(3)

This paragraph applies if—

(a)

the first right was acquired before 6th April 1999; and

(b)

the total discount on the total market value of the subsequent right is substantially greater than the total discount on the total market value of the first right at the time of its assignment or release.

(4)

In this paragraph “subsequent right” means a right—

(a)

to acquire shares in the relevant body corporate or any other body corporate; and

(b)

which is not treated as consideration for the assignment or release of the first right by virtue of section 136(1) of the Taxes Act.