Part 7: Approval of schemes
Paragraph 28: Application for approval
3438.This paragraph deals with the mechanics of the application for approval of a CSOP option scheme. The paragraph derives from part of paragraph 1(1) and paragraph 1(2) of Schedule 9 to ICTA.
3439.Sub-paragraph (3) states that, after the Inland Revenue have reached their decision, they must give notice of their decision to the scheme organiser. See Change 170 in Annex 1.
Paragraph 29: Appeal against refusal of approval
3440.This paragraph derives from most of paragraph 5 of Schedule 9 to ICTA. (Sub-paragraph (c) of paragraph 5 relates to approved profit sharing schemes.) The procedure, in paragraph 5 of Schedule 9 to ICTA, is that a “matter” is referred to the Special Commissioners for them to “hear and determine the matter in like manner as an appeal” if the Inland Revenue refuse to approve the scheme. Sub-paragraph (1) provides that the scheme organiser may appeal to the Special Commissioners.
3441.The change to a straightforward appeal procedure is intended to simplify matters. Section 48(2) of TMA 1970 provides that various provisions of that Act, as regards proceedings before the Commissioners, apply to “appeals other than appeals against assessments” and to “proceedings…to be heard and determined in the same way as an appeal”. For the purposes of this paragraph, there is therefore no real difference in law or practice between provisions that refer to an appeal and those that refer to proceedings where the Special Commissioners shall “hear and determine the matter in like manner as an appeal”. See Change 171 in Annex 1.
3442.Sub-paragraphs (3) and (4) now provide that the Special Commissioners may specify the date from which the Scheme is to be treated as approved. See Change 171 in Annex 1.
Paragraph 30: Withdrawal of approval
3443.This paragraph derives from paragraph 3(1) of Schedule 9 to ICTA. The rewritten legislation includes the use of a new label, a “disqualifying event”. This expression does not occur in Schedule 9 to ICTA, but it does occur in the SIP code and in the EMI code.
3444.Sub-paragraph (1) has been expanded to include a requirement that the Inland Revenue give notice of their withdrawal of approval. See Change 170 in Annex 1.
3445.Paragraphs 3(2) and (3) of Schedule 9 to ICTA relate to approved profit sharing schemes.
Paragraph 31: Approval ineffective after unapproved alteration
3446.This paragraph derives from paragraph 4 of Schedule 9 to ICTA. An unapproved alteration to an approved CSOP option scheme is ineffective after the date of the alteration. The rule is clarified by the addition of the words “of the scheme” in the final line of sub-paragraph (1).
3447.Sub-paragraph (2) is new. It introduces an express requirement for the Inland Revenue to notify the scheme organiser of their decision to approve or not to approve an alteration. See Change 170 in Annex 1.
Paragraph 32: Appeal against withdrawal of approval etc.
3448.This paragraph derives from paragraph 5 of Schedule 9 to ICTA.
3449.As in the case of paragraph 29 of this Schedule, sub-paragraph (2) provides that the scheme organiser may appeal to the Special Commissioners, as opposed to requiring the Special Commissioners to “hear and determine the matter in like manner as an appeal”. See Change 171 in Annex 1.
3450.The change to a straightforward appeal procedure is intended to simplify matters. Section 48(2) of TMA 1970 provides that various provisions of that Act, as regards proceedings before the Commissioners, apply to “appeals other than appeals against assessments” and to “proceedings…to be heard and determined in the same way as an appeal”. For the purposes of this paragraph, there is therefore no real difference in law or practice between provisions that refer to an appeal and those that refer to proceedings where the Special Commissioners shall “hear and determine the matter in like manner as an appeal”.
