Overview
2011.In this Chapter, after an introductory section (section 488), the first major topic dealt with is the tax advantages that an approved SIP possesses (in sections 489 to 499). The second major topic dealt with is the tax charges that may arise (in sections 500 to 508). The provisions relating to each major topic have been arranged to deal with the award of shares, then with the holding of shares, and then, finally, with shares ceasing to be subject to the plan. This Chapter concludes with provisions dealing with the making of PAYE deductions in connection with the tax charges that may arise (in sections 509 to 514), and with a section referring to the other provisions in the Tax Acts that deal with SIPs (in section 515).
Section 488: Approved share incentive plans (SIPs)
2012.This section is introductory. It indicates the main components of the SIP code, and defines some terms of general application.
2013.Subsection (1) is new, and indicates the main topics dealt with in the SIP code. Subsection (2), which is also new, then indicates which of those topics are dealt with in Schedule 2.
2014.Subsection (3) contains the definition of “the SIP code”. This definition is also new.
2015.Subsection (4) defines terms used generally in the SIP code. Of these terms:
the definition of an “approved” plan may be deduced from the definition of “approved employee share ownership plan” in paragraph 129(1) of Schedule 8 to FA 2000; but, in this Act, the definition is now followed by a new provision, stating that the word “approval” has a corresponding meaning;
the definition of a “PAYE deduction” generalises the partial definitions in paragraphs 95(10) and 96(5) of Schedule 8 to FA 2000; and
the definition of a “share incentive plan” derives from the definition of an “employee share ownership plan” in paragraph 1(1) of Schedule 8 to FA 2000.
2016.Subsection (5) draws attention to the fact that there is an index relating to the SIP code at the end of Schedule 2. Expressions contained in that index have the meanings that are indicated there.
