Source: http://www.legislation.gov.uk/ukpga/2003/1/schedule/4/enacted/data.xht?view=snippet&wrap=true
Timestamp: 2020-02-28 09:59:09
Document Index: 174438370

Matched Legal Cases: ['arts 2', 'art 4', 'art 5', 'art 6', 'art 7', 'art 4', 'art 5', 'art 6', 'art 7', 'arts 2', 'arts 2', 'art 8']

SCHEDULE 4Approved CSOP schemes
1(1)This Schedule makes provision for the approval of CSOP schemes by the Inland Revenue.
(2)Parts 2 to 6 of this Schedule contain requirements that have to be met in order for schemes to be approved under this Schedule.
the shares to which a scheme can apply (see Part 4),
the share options which may be granted under a scheme (see Part 5), and
the exchange of share options (see Part 6).
(4)Part 7 of this Schedule deals with the approval of schemes and the withdrawal of approval.
2(1)In the CSOP code a “CSOP scheme” means (in accordance with section 521(4)) a scheme which—
(a)is established by a company,
(b)provides for share options to be granted to employees and directors, and
(c)is not an SAYE option scheme (within the meaning of the SAYE code: see section 516(4)).
(2)In the CSOP code, in relation to a CSOP scheme—
“participant” means an individual who has been granted (but has not yet exercised) share options under the scheme (“the options”);
“participate” means obtain and exercise share options under the scheme;
“the scheme organiser” means the company which has established the scheme.
3(1)A CSOP scheme established by a company that controls one or more other companies (a “parent scheme company”) may extend to all or any of those other companies.
(2)In the CSOP code a CSOP scheme established by a parent scheme company which so extends is called a “group scheme”.
(3)In relation to a group scheme a “constituent company” means—
(a)the parent scheme company, or
(b)any other company to which for the time being the scheme is expressed to extend.
(4)Paragraph 34 deals with jointly owned companies and companies controlled by them.
4A CSOP scheme must meet the requirements of—
paragraph 5 (general restriction on contents of scheme), and
paragraph 6 (limit on value of shares subject to options).
Part 4Shares to which schemes can apply
15(1)A CSOP scheme must meet the requirements of—
paragraph 16 (shares must be ordinary shares of certain companies),
paragraph 17 (requirements as to listing),
paragraph 18 (shares must be fully paid up and not redeemable),
paragraph 19 (only certain kinds of restrictions allowed), and
paragraph 20 (requirements as to other shareholdings).
(2)In this Part “eligible shares” means shares which may be acquired by the exercise of share options under the scheme.
16Eligible shares must form part of the ordinary share capital of—
(a)the scheme organiser,
(b)a company which has control of the scheme organiser, or
(c)a company which either is, or has control of, a company which is a member of a consortium owning either the scheme organiser or a company having control of the scheme organiser.
17(1)Eligible shares must be —
18Eligible shares must be—
19(1)Eligible shares must not be subject to any restrictions (see sub-paragraph (4)) other than—
This is subject to sub-paragraphs (5) to (7).
(6)Sub-paragraph (4) also does not apply to any terms of a loan making provision about how it is to be repaid or the security to be given for it.
(7)Any discretion of the directors under the articles of association of the company to refuse to accept the transfer of shares is to be disregarded for the purposes of this paragraph if the directors—
(8)In this paragraph “articles of association” includes, in the case of a company incorporated under the law of a country outside the United Kingdom, any equivalent document relating to the company.
20(1)The majority of the issued shares of the same class as the eligible shares must be—
(a)employee-control shares, or
(b)open market shares,
unless the eligible shares are shares in a company whose ordinary share capital consists of shares of one class only.
(2)Shares in a company are “employee-control shares” if—
(a)the persons holding the shares are, by virtue of their holding, together able to control the company, and
(b)those persons are or have been employees or directors of the company or of another company which is under the control of the company.
(3)Shares in a company are “open market shares” if the persons holding the shares are not—
(a)persons who acquired their shares as a result of a right conferred on them or an opportunity afforded to them as a director or employee of the scheme organiser or any other company, and not as a result of an offer to the public, or
(b)trustees holding shares on behalf of persons who acquired their beneficial interests in the shares as mentioned in paragraph (a), or
(c)in the case of shares which—
(i)are not of a class listed on a recognised stock exchange, and
(ii)are in a company which is under the control of a listed company (as defined by paragraph 17(2)),
companies which have control of the company whose shares are in question or of which that company is an associated company.
Part 5Requirements etc. relating to share options
23(1)The scheme must ensure that share options granted to a participant are not capable of being transferred by the participant.
(2)Paragraph 25 provides for the exercise of the options where the participant has died.
24(1)The scheme may provide that an individual may exercise share options under it after ceasing to be a full-time director or qualifying employee.
(2)“Qualifying employee” has the same meaning as in paragraph 8 (the employment requirement).
Part 6Exchange of share options
26(1)A CSOP scheme may provide that if—
(a)there is a company reorganisation affecting a scheme company (that is, a company whose shares may be acquired by the exercise of share options obtained under the scheme: see paragraph 16), and
(ii)Article 418 of the Companies (Northern Ireland) Order 1986 (S.I. 1986/1032 (N.I.6)) (corresponding provision for Northern Ireland); or
27(1)This paragraph applies to a scheme that makes provision under paragraph 26 (exchange of options on company reorganisation).
(b)is either the acquiring company itself or some other company within sub-paragraph (b) or (c) of paragraph 16 (shares must be ordinary shares of certain companies), namely—
(a)the shares to which they relate must meet the conditions in paragraphs 16 to 20 (types of share that may be used),
(5)For the purposes of the CSOP code, new share options granted under the terms of a provision included in a scheme under paragraph 26 are to be treated as having been granted at the time when the corresponding old options were granted.
Part 7Approval of schemes
(a)a CSOP scheme has been established, and
(b)the scheme organiser makes an application to the Inland Revenue for approval of the scheme,
the Inland Revenue must approve the scheme if they are satisfied that it meets the requirements of Parts 2 to 6 of this Schedule.
(2)An application for approval—
(3)Once the Inland Revenue have decided whether or not to approve the scheme, they must give notice of their decision to the scheme organiser.
30(1)If any disqualifying event occurs in connection with an approved CSOP scheme, the Inland Revenue may by a notice given to the scheme organiser withdraw the approval with effect from—
(2)A “disqualifying event” occurs in connection with a scheme if—
(a)any of the requirements of Parts 2 to 6 of this Schedule ceases to be met; or
(b)the scheme organiser fails to provide information requested by the Inland Revenue under paragraph 33.
31(1)If—
(a)an alteration is made in a CSOP scheme that has been approved, and
33(1)The Inland Revenue may by notice require any person to provide them with any information—
(a)which they reasonably require for the performance of their functions under the CSOP code, and
(i)to decide whether to approve a CSOP scheme or to withdraw an approval already given, or
(ii)to determine the liability to tax, including capital gains tax, of any person who has participated in a scheme, and
(b)information about the administration of a scheme and any alteration of the terms of a scheme.
(3)The notice must require the information to be provided within a specified time, which must not end earlier than 3 months after the date when the notice is given.
35(1)For the purposes of the CSOP code one company is an “associated company” of another company at a given time if, at that time or at any other time within one year previously—
(2)For the purposes of sub-paragraph (1) the question whether a person controls a company is to be determined in accordance with section 416(2) to (6) of ICTA.
36(1)In the CSOP code—
“market value” has the same meaning as it has for the purposes of TCGA 1992 by virtue of Part 8 of that Act.
(2)For the purposes of the CSOP code a company is a member of a consortium owning another company if it is one of a number of companies—