Source: http://www.legislation.gov.uk/ukpga/2014/26/schedule/8/enacted/data.xht?view=snippet&wrap=true
Timestamp: 2018-03-20 14:06:15
Document Index: 514213848

Matched Legal Cases: ['ART 1', 'art 10', 'art 10', 'ART 10', 'arts 2', 'arts 2', 'arts 2', 'arts 2', 'arts 2', 'arts 2', 'arts 2', 'arts 2', 'art 5', 'art 1', 'art 1', 'art 6', 'art 9', 'art 11']

PART 1Share incentive plans
2In the title omit “Approved”.
3(1)Section 488 (introduction to share incentive plans) is amended as follows.
(b)in paragraph (b) for “those plans” substitute “share incentive plans (“SIPs”) which are Schedule 2 SIPs”.
(a)omit the definitions of “approved” and “approval”, and
(b)after the definition of “PAYE deduction” insert—
““Schedule 2 SIP” is to be read in accordance with paragraph 1 and Part 10 of Schedule 2;”.
4(1)Section 489 (operation of tax advantages) is amended as follows.
5In section 498 (no charge on shares ceasing to be subject to plan in certain circumstances) in subsection (9)(b) for “an approved” substitute “a Schedule 2”.
7In section 503 (charge on partnership share money) in subsection (2), in the entry for paragraph 56, for “withdrawal of plan approval” substitute “plan ceasing to be a Schedule 2 SIP”.
9In section 509 (modification of section 696) in subsection (1)(a) for “an approved” substitute “a Schedule 2”.
11In section 511 (deductions to be made by trustees) in subsection (1) for “an approved” substitute “a Schedule 2”.
12In section 515 (tax advantages and charges under other Acts) in subsection (2)(a) and (d) for “an approved” substitute “a Schedule 2”.
13Schedule 2 is amended as follows.
16(1)Paragraph 1 (introduction) is amended as follows.
(a)requires notice of a plan to be given to Her Majesty’s Revenue and Customs (“HMRC”) in order for the plan to be a Schedule 2 SIP (see paragraph 81A(1)),
17In the cross-heading before paragraph 6 omit “for approval”.
18(1)Paragraph 6 (general requirements for SIPs) is amended as follows.
“(2)The requirements of this Part are also to be taken to include the requirements of paragraphs 89 and 90 (plan termination notices etc).”
19(1)Paragraph 7 (the purpose of the plan) is amended as follows.
(a)after “provide” insert “, in accordance with this Schedule,”, and
(b)for “nature” substitute “form”.
“(1A)The plan must not provide benefits to employees otherwise than in accordance with this Schedule.
(1B)For example, the plan must not provide cash to employees as an alternative to shares.
(1C)Sub-paragraph (1A) does not prohibit an employee receiving a benefit from a company as a result of any shares in that company being held on the employee’s behalf under the plan where the employee would have received the same benefit from the company had the shares been acquired by the employee otherwise than by virtue of the plan.”
(4)Omit sub-paragraph (2).
23In paragraph 43 (partnership shares: introduction) after sub-paragraph (2A) insert—
“(2B)Partnership shares may (notwithstanding sub-paragraph (2A) if relevant) be subject to provision requiring partnership shares acquired on behalf of an employee to be offered for sale but only if the requirement of sub-paragraph (2C) is met.
(2C)The consideration at which the shares are required to be offered for sale must be at least equal to—
(a)the amount of partnership share money applied in acquiring the shares on behalf of the employee, or
24In the cross-heading before paragraph 56 for “withdrawal of approval” substitute “plan ceasing to be a Schedule 2 SIP”.
28For Part 10 substitute—
“PART 10Notification of plans, annual returns and enquiries
Notice of SIP to be given to HMRC
81A(1)For a SIP to be a Schedule 2 SIP, notice of the SIP must be given to Her Majesty’s Revenue and Customs (“HMRC”).
(a)be given by the company,
(a)that the requirements of Parts 2 to 9 of this Schedule are met in relation to the SIP, and
(b)if the declaration is made after the first date on which awards of shares are made under the SIP (“the first award date”), that those requirements—
(i)were met in relation to those awards of shares, and
(ii)have otherwise been met in relation to the SIP at all times on or after the first award date when shares appropriated to, or acquired on behalf of, individuals under the SIP have been held under the SIP.
(4)If notice is given under this paragraph in relation to a SIP, for the purposes of the SIP code the SIP is to be a Schedule 2 SIP at all times on and after the relevant date (but not before that date).
(5)But if the notice is given after the initial notification deadline, the SIP is to be a Schedule 2 SIP only from the beginning of the relevant tax year.
“the initial notification deadline” is 6 July in the tax year following that in which the first award date falls,
if that declaration is made after the first award date, the first award date, and
81B(1)This paragraph applies if notice is given in relation to a SIP under paragraph 81A.
(2)The company must give to HMRC a return for the tax year in which the relevant date falls and for each subsequent tax year (subject to sub-paragraph (9)).
(3)If paragraph 81A(5) applies in relation to the SIP, in sub-paragraph (2) the reference to the tax year in which the relevant date falls is to be read as a reference to the relevant tax year.
(a)any person who has participated in the SIP, or
(b)any other person whose liability to tax the operation of the SIP is relevant to.
(6)If during a tax year an alteration is made in a key feature of—
(a)the SIP, or
(b)the plan trust,
(7)A declaration within this sub-paragraph is a declaration that the alteration has not caused the requirements of Parts 2 to 9 of this Schedule not to be met in relation to the SIP.
(8)For the purposes of sub-paragraph (6) a “key feature” of a SIP or plan trust is a provision of the SIP or plan trust which is necessary in order for the requirements of Parts 2 to 9 of this Schedule to be met in relation to the SIP.
(9)A return is not required for any tax year following that in which the termination condition is met in relation to the SIP.
(10)For the purposes of this Part “the termination condition” is met in relation to a SIP when—
(a)a plan termination notice has been issued in relation to it under paragraph 89, and
(b)all the requirements under paragraphs 56(3), 68(4)(c) and 90 have been met by the trustees.
(11)If the company becomes aware that—
81C(1)This paragraph applies if the company fails to give a return for a tax year (containing, or accompanied by, all required information and declarations) on or before the date mentioned in paragraph 81B(4)(b) (“the date for delivery”).
(8)Liability for a penalty under this paragraph does not arise if the company satisfies HMRC (or, on an appeal under paragraph 81K, the tribunal) that there is a reasonable excuse for its failure.
(a)an insufficiency of funds is not a reasonable excuse, unless attributable to events outside the company’s control,
(b)where the company relies on any other person to do anything, that is not a reasonable excuse unless the company took reasonable care to avoid the failure, and
(c)where the company had a reasonable excuse for the failure but the excuse ceased, the company is to be treated as having continued to have the excuse if the failure is remedied without unreasonable delay after the excuse ceased.
81D(1)A notice under paragraph 81A, and any information accompanying the notice, must be given electronically.
(2)A return under paragraph 81B, and any information accompanying the return, must be given electronically.
(3)But, if HMRC consider it appropriate to do so, HMRC may allow the company to give a notice or return or any accompanying information in another way; and, if HMRC do so, the notice, return or information must be given in that other way.
81E(1)This paragraph applies if a return under paragraph 81B, or any information accompanying such a return—
(a)is given otherwise than in accordance with paragraph 81D, or
(ii)which is not corrected as required by paragraph 81B(11).
81F(1)This paragraph applies if notice is given in relation to a SIP under paragraph 81A.
(2)HMRC may enquire into the SIP if HMRC give notice to the company of HMRC’s intention to do so no later than—
(b)if the notice under paragraph 81A is given after the initial notification deadline, 6 July in the second tax year following the relevant tax year.
(3)HMRC may enquire into the SIP if HMRC give notice to the company of HMRC’s intention to do so no later than 12 months after the date on which a declaration within paragraph 81B(7) is given to HMRC.
(4)Sub-paragraph (5) applies if (at any time) HMRC have reasonable grounds for believing that requirements of Parts 2 to 9 of this Schedule—
(a)are not met in relation to the SIP, or
(b)have not been met in relation to the SIP.
(5)HMRC may enquire into the SIP if HMRC give notice to the company of HMRC’s intention to do so.
(6)Notice may be given, and an enquiry may be conducted, under sub-paragraph (2), (3) or (5) even though the termination condition has been met in relation to the SIP.
81G(1)An enquiry under paragraph 81F(2), (3) or (5) is completed when HMRC give the company a notice (a “closure notice”) stating—
(i)paragraph 81H is to apply,
(ii)paragraph 81I is to apply, or
(iii)neither paragraph 81H nor paragraph 81I is to apply.
(2)If the company receives notice under paragraph 81F(2), (3) or (5), the company may make an application to the tribunal for a direction requiring a closure notice for the enquiry to be given within a specified period.
81H(1)This paragraph applies if HMRC decide—
(a)that requirements of Parts 2 to 9 of this Schedule—
(i)are not met in relation to the SIP, or
(ii)have not been met in relation to the SIP, and
(a)the SIP is not to be a Schedule 2 SIP with effect from—
(b)the company is liable for a penalty of an amount decided by HMRC.
(3)Sub-paragraph (2)(a) does not affect the operation of the SIP code in relation to shares appropriated to, or acquired on behalf of, an individual under the SIP before the time mentioned in sub-paragraph (2)(a)(i) or (ii) (as the case may be).
(4)In particular, if the SIP was a Schedule 2 SIP when the shares were appropriated to, or acquired on behalf of, the individual, the SIP is to continue to be a Schedule 2 SIP in relation to those shares.
(a)the total income tax for which participants in the SIP have not been liable, or will not be liable in the future, and
in consequence of the SIP having been a Schedule 2 SIP at any relevant time before the time mentioned in sub-paragraph (2)(a)(i) or (ii) (as the case may be).
(6)The liabilities covered by sub-paragraph (5) include liabilities for income tax or contributions which a person has not had, or will not have, in consequence of sub-paragraphs (3) and (4).
(7)In this paragraph “relevant time” means any time before the giving of the closure notice when requirements of Parts 2 to 9 of this Schedule were not met in relation to the SIP.
81I(1)This paragraph applies if HMRC decide—
(ii)have not been met in relation to the SIP, but
(b)that the situation is not, or was not, so serious that paragraph 81H should apply.
(2)If this paragraph applies, the company—
(b)must, no later than 90 days after the relevant day, secure that the requirements of Parts 2 to 9 of this Schedule are met in relation to the SIP.
(a)the last day of the period in which notice of an appeal under paragraph 81K(2)(b) may be given, or
(5)Sub-paragraph (2)(b) does not apply if the termination condition was met in relation to the SIP before the giving of the closure notice or is met before the end of the 90 day period mentioned in sub-paragraph (2)(b).
(6)If the company fails to comply with sub-paragraph (2)(b), HMRC may give the company a notice stating that that is the case (a “default notice”).
(7)If the company is given a default notice—
(b)the company is liable for a further penalty of an amount decided by HMRC.
(8)Sub-paragraph (7)(a) does not affect the operation of the SIP code in relation to shares appropriated to, or acquired on behalf of, an individual under the SIP before the time mentioned in sub-paragraph (7)(a)(i) or (ii) (as the case may be).
(9)In particular, if the SIP was a Schedule 2 SIP when the shares were appropriated to, or acquired on behalf of, the individual, the SIP is to continue to be a Schedule 2 SIP in relation to those shares.
in consequence of the SIP having been a Schedule 2 SIP at any relevant time before the time mentioned in sub-paragraph (7)(a)(i) or (ii) (as the case may be).
(11)The liabilities covered by sub-paragraph (10) include liabilities for income tax or contributions which a person has not had, or will not have, in consequence of sub-paragraphs (8) and (9).
(12)In this paragraph “relevant time” means any time before the giving of the default notice when requirements of Parts 2 to 9 of this Schedule were not met in relation to the SIP.
81J(1)This paragraph applies if the company is liable for a penalty under this Part.
(3)Subject to sub-paragraphs (4) and (5), the assessment must be made no later than 12 months after the date on which the company becomes liable for the penalty.
(4)In the case of a penalty under paragraph 81E(1)(b), the assessment must be made no later than—
(5)In the case of a penalty under paragraph 81H(2)(b) or 81I(2)(a) or (7)(b) where notice of appeal is given under paragraph 81K(2) or (3), the assessment must be made no later than 12 months after the date on which the appeal is determined or withdrawn.
(b)if notice of appeal is given against the penalty under paragraph 81K(1) or (4), no later than 30 days after the date on which the appeal is determined or withdrawn.
(7)The penalty may be enforced as if it were corporation tax or, if the company is not within the charge to corporation tax, income tax charged in an assessment and due and payable.
81K(1)The company may appeal against a decision of HMRC that the company is liable for a penalty under paragraph 81C or 81E.
(2)The company may appeal against—
(a)a decision of HMRC mentioned in paragraph 81H(1) or a decision of HMRC to specify, or not to specify, a relevant time in the closure notice;
(b)a decision of HMRC mentioned in paragraph 81I(1).
(3)The company may appeal against a decision of HMRC—
(a)to give the company a default notice under paragraph 81I;
(4)The company may appeal against a decision of HMRC as to the amount of a penalty payable by the company under this Part.
(5)The company may appeal against a decision of an officer of Revenue and Customs to give a direction under section 998 of CTA 2009 (withdrawal of corporation tax deductions in relation to a Schedule 2 SIP).
(6)Notice of appeal must be given to HMRC no later than 30 days after the date on which—
(a)in the case of an appeal under sub-paragraph (1) or (4), the notice under paragraph 81J(2) is given to the company;
(c)in the case of an appeal under sub-paragraph (3), the default notice is given;
(d)in the case of an appeal under sub-paragraph (5), notice of the officer’s decision is given to the company.
(7)On an appeal under sub-paragraph (1), (3)(a) or (5) which is notified to the tribunal, the tribunal may affirm or cancel the decision.
(8)On an appeal under sub-paragraph (2) or (3)(b) which is notified to the tribunal, the tribunal may—
(9)On an appeal under sub-paragraph (4) which is notified to the tribunal, the tribunal may—
(10)Subject to this paragraph and paragraph 81J, the provisions of Part 5 of TMA 1970 relating to appeals have effect in relation to an appeal under this paragraph as they have effect in relation to an appeal against an assessment to corporation tax or, if the company is not within the charge to corporation tax, income tax.”
30In paragraph 90 (effect of plan termination notice) in sub-paragraph (2) for “awarded to” substitute “appropriated to, or acquired on behalf of,”.
35(1)Section 238A (share schemes and share incentives) is amended as follows.
(3)In subsection (1) omit “approved”.
(4)In subsection (2)(a) for “approved” substitute “Schedule 2”.
38In paragraph 2 (conditions relating to disposal) in sub-paragraph (1) for “approved” substitute “a Schedule 2 SIP”.
40In the title omit “Approved”.
41In the title of Part 1 for “Approved” substitute “Schedule 2”.
42(1)Paragraph 1 (introduction to Part 1) is amended as follows.
(2)In sub-paragraph (1) for “an approved” substitute “a Schedule 2”.
(3)In sub-paragraphs (2) and (3) omit “approved”.
43In paragraph 2 (gains accruing to trustees) in sub-paragraph (1)(a) omit “approved”.
44ITEPA 2003 is amended as follows.
50In paragraph 11 of Schedule 4 (CSOP schemes: material interest) in sub-paragraph (5)(a) for “approved” substitute “Schedule 2”.
51In paragraph 30 of Schedule 5 (enterprise management incentives: material interest) in sub-paragraph (7)(a) for “share incentive plan approved under Schedule 2 (SIPs)” substitute “Schedule 2 SIP (see Schedule 2)”.
54In section 382 (contents of Chapter 3) in subsection (1)(c) for “an approved” substitute “a Schedule 2”.
55In the cross-heading before section 392 for “approved” substitute “Schedule 2”.
57(1)Section 394 (distribution when dividend shares cease to be subject to SIP) is amended as follows.
“(3A)But if the shares cease to be subject to the plan by virtue of a provision of the kind mentioned in paragraph 65(2) of Schedule 2 to ITEPA 2003 (provision requiring dividend shares to be offered for sale), the amount of the distribution treated as made is the amount equal to the relevant fraction of the market value of the shares at the time they are offered for sale if that amount is less than the amount given by subsection (3).
A is so much of the amount of the cash dividend applied to acquire the shares on the participant’s behalf as represents a cash dividend paid in respect of plan shares in a UK resident company, and
(4)In subsection (7) for “approved” substitute “Schedule 2”.
62(1)Section 405 (SIP shares: introduction) is amended as follows.
(3)In subsections (3) and (4) omit “approved”.
64In section 408 (reduction in tax due in cases within section 407) in subsections (1)(b) and (3) for “approved” substitute “Schedule 2”.
65Chapter 9 of Part 6 of ITTOIA 2005 (exempt income) is amended as follows.
67(1)Section 770 (amounts applied by SIP trustees) is amended as follows.
(2)In subsection (1)(a) for “an approved” substitute “a Schedule 2”.
(3)In subsections (5) and (6) omit “approved”.
68Part 9 of ITA 2007 (special rules about settlements and trusts) is amended as follows.
70In section 479 (trustees’ accumulated or discretionary income charged at special rates) in subsection (5) for “approved” substitute “Schedule 2”.
72In section 489 (“the applicable period”) in subsection (8)(a) for “approved” substitute “Schedule 2”.
73In section 490 (interpretation of Chapter 5) in subsection (1) omit “approved”.
74Chapter 1 of Part 11 of CTA 2009 (relief for employee share acquisition schemes: share incentive plans) is amended as follows.
75(1)Section 983 (overview of Chapter) is amended as follows.
(2)In subsection (1) for “approved” substitute “Schedule 2”.
(3)In subsection (7) for “approval for a plan is withdrawn” substitute “a plan ceases to be a Schedule 2 share incentive plan”.
77(1)Section 988 (deductions for running expenses) is amended as follows.
(3)In subsections (1) and (3) for “an approved” substitute “a Schedule 2”.
78In section 989 (deduction for contribution to plan trust) in subsection (1)(a) for “an approved” substitute “a Schedule 2”.
80In section 995 (deduction for additional expense in providing partnership shares) in subsection (1)(a) for “an approved” substitute “a Schedule 2”.
83(1)Section 998 (withdrawal of deductions) is amended as follows.
(2)In the heading for “approval for share incentive plan withdrawn” substitute “share incentive plan ceases to be a Schedule 2 share incentive plan”.
(i)after “section” insert “987,”, and
(ii)for “an approved” substitute “a Schedule 2”, and
“(b)by virtue of paragraph 81H or 81I of Schedule 2 to ITEPA 2003 the plan is not to be a Schedule 2 share incentive plan.”
84The Individual Savings Account Regulations 1998 are amended as follows.
86In regulation 7 (qualifying investments) in paragraph (2)(h)(iii) for “an approved” substitute “a Schedule 2”.
90Paragraphs 91 to 96 below apply in relation to a SIP established before 6 April 2014.
91(1)If the SIP was an approved SIP immediately before 6 April 2014, this paragraph applies to any provision which the SIP contains immediately before that date and which requires the approval or agreement of Her Majesty’s Revenue and Customs or an officer of Revenue and Customs to be obtained in relation to any matter.
(2)On and after 6 April 2014, the provision is to have effect without the requirement for the approval or agreement, unless the requirement reflects a requirement for approval or agreement set out in Schedule 2 to ITEPA 2003 (as amended by this Part).
96The amendments made by paragraph 31 above do not affect a notice given in relation to the SIP under paragraph 93 of Schedule 2 to ITEPA 2003 before 6 April 2014.