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Income Tax (Earnings and Pensions) Act 2003

Section 498: No charge on shares ceasing to be subject to plan in certain circumstances

2037.This section is the second of two that deal with the tax advantages connected with shares ceasing to be subject to approved SIPs. It provides that a participant is not liable to income tax on shares ceasing to be subject to the plan if the shares so cease because the participant ceases to be in relevant employment in the circumstances specified in subsection (2). The meaning of a participant ceasing to be in relevant employment is explained in paragraph 95 of Schedule 2 to this Act.

2038.This section derives from sub-paragraphs (1) and (2) of paragraph 87 of Schedule 8 to FA 2000. Subsection (2)(d) reorganises the material to be found in paragraph 87(3)(d) of Schedule 8.

2039.That paragraph concludes by providing two definitions. The first definition (that of “redundancy”) has now been placed in paragraph 99(1) of Schedule 2 to this Act; and the second (which appears in the rewritten legislation as a definition of “the specified retirement age”) has now been placed in paragraph 98 of Schedule 2.

2040.The material set out in subsection (2) of this section is also set out in full in paragraph 32(2) of Schedule 2. This duplication should assist the reader.

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