[F1554EExclusions: steps under certain schemes etcU.K.
(1)Chapter 2 does not apply by reason of a relevant step if the step is taken under any of the following—
(a)[F2a Schedule 2] SIP (within the meaning of Chapter 6 of Part 7),
(b)[F3a Schedule 3] SAYE option scheme (within the meaning of Chapter 7 of Part 7),
(c)[F4a Schedule 4] CSOP scheme (within the meaning of Chapter 8 of Part 7),
(d)an arrangement the sole purpose of which is the provision of excluded benefits (as defined in section 393B(3)),
(e)an arrangement the sole purpose of which is the making of payments which are to be disregarded in the calculation mentioned in regulation 25 of the Social Security (Contributions) Regulations 2001 (S.I. 2001/1004) by virtue of paragraph 12 of Part 10 of Schedule 3 to those Regulations (as that paragraph has effect by virtue of regulation 2(3) of the Social Security (Contributions) (Amendment No. 9) Regulations 2007 (S.I. 2007/2905)),
(f)a pension scheme set up by a government outside the United Kingdom for the benefit of its employees or primarily for their benefit,
(g)a registered pension scheme, or
(h)an arrangement the sole purpose of which is the making of payments (within the meaning of Chapter 3 of Part 4 of FA 2004 (see section 161(2) of that Act))—
(i)to which section 161(4) of FA 2004 applies in relation to a registered pension scheme (or a registered pension scheme which has been wound up), and
(ii)which are authorised in relation to that scheme by section 160(1) of FA 2004.
(2)Subject to subsection (4), subsection (3) applies to a relevant step taken by a person (“P”) if—
(a)the relevant step is not taken under an arrangement mentioned in subsection (1)(a) to (c), and
(b)there is no connection (direct or indirect) between the relevant step and a tax avoidance arrangement.
(3)Chapter 2 does not apply by reason of the relevant step if the step is taken solely for the purpose of—
(a)acquiring or holding shares—
(i)to be awarded under [F5a Schedule 2] SIP, or
(ii)to be provided pursuant to options granted under [F6a Schedule 3] SAYE option scheme or [F7a Schedule 4] CSOP scheme, or
(b)providing shares pursuant to—
(i)an award of shares under [F8a Schedule 2] SIP, or
(ii)an option granted under [F9a Schedule 3] SAYE option scheme or [F10a Schedule 4] CSOP scheme.
(4)Subsection (3) does not apply to the relevant step if, immediately before or after the step is taken—
(a)the total number of shares of any type held, in relation to the [F11Schedule 2] SIP, the [F12Schedule 3] SAYE option scheme or the [F13Schedule 4] CSOP scheme, by P and any other persons for purposes within subsection (3)(a) and (b), exceeds
(b)the maximum number of shares of that type which might reasonably be expected to be required, in relation to the [F11Schedule 2] SIP, the [F12Schedule 3] SAYE option scheme or the [F13Schedule 4] CSOP scheme, for those purposes over the period of ten years starting with the day on which the relevant step is taken.
(5)Terms used in subsections (2) to (4) have the same meaning as they have in Chapter 6, 7 or 8 of Part 7 (as the case may be).
(6)Chapter 2 does not apply by reason of a relevant step taken by a person (“P”) if—
(a)the relevant step is taken for the sole purpose of—
(i)granting qualifying options under an EMI arrangement,
(ii)acquiring or holding shares to be provided pursuant to qualifying options granted under an EMI arrangement, or
(iii)providing shares pursuant to qualifying options granted under an EMI arrangement, and
(b)there is no connection (direct or indirect) between the relevant step and a tax avoidance arrangement.
(7)But subsection (6) does not apply to the relevant step if, immediately before or after the step is taken—
(a)the total number of shares of any type held, in relation to the EMI arrangement, by P and any other persons for purposes within subsection (6)(a)(i) to (iii), exceeds
(b)the maximum number of shares of that type which might reasonably be expected to be required, in relation to the EMI arrangement, for those purposes over the period of ten years starting with the day on which the relevant step is taken.
(8)In subsections (6) and (7) “EMI arrangement” means an arrangement under which qualifying options are granted.
(9)Terms used in subsections (6) to (8) have the same meaning as in Chapter 9 of Part 7.
(10)Subsection (11) applies if—
(a)a person (“P”) takes a relevant step within section 554B by reason of which Chapter 2 would apply apart from subsection (3) or (6), and
(b)at any time (“the relevant time”) the sum of money or asset (or any part of it) which is the subject of the relevant step—
(i)ceases to be held by or on behalf of P solely for purposes within subsection (3)(a) and (b) or (6)(a)(i) to (iii), but
(ii)continues to be held by or on behalf of P on the basis mentioned in section 554B(1)(a) or (b).
(11)This Part has effect as if a relevant step within section 554B were taken at the relevant time—
(a)the subject of which is the sum of money or asset (or the part of it) mentioned in subsection (10)(b), and
(b)by reason of which Chapter 2 is to apply (subject only to section 554A(4)).
(12)Chapter 2 does not apply by reason of a relevant step taken by the Independent Parliamentary Standards Authority in relation to a member of the House of Commons.]
Textual Amendments
F1Pt. 7A inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 1
F2Words in s. 554E(1)(a) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 49(2), 89 (with Sch. 8 paras. 90-96)
F3Words in s. 554E(1)(b) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 136(2), 146 (with Sch. 8 paras. 147-157)
F4Words in s. 554E(1)(c) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 200(2), 204 (with Sch. 8 paras. 205-215)
F5Words in s. 554E(3)(a)(i) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 49(2), 89 (with Sch. 8 paras. 90-96)
F6Words in s. 554E(3)(a)(ii) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 136(3), 146 (with Sch. 8 paras. 147-157)
F7Words in s. 554E(3)(a)(ii) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 200(3), 204 (with Sch. 8 paras. 205-215)
F8Words in s. 554E(3)(b)(i) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 49(2), 89 (with Sch. 8 paras. 90-96)
F9Words in s. 554E(3)(b)(ii) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 136(3), 146 (with Sch. 8 paras. 147-157)
F10Words in s. 554E(3)(b)(ii) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 200(3), 204 (with Sch. 8 paras. 205-215)
F11Words in s. 554E(4)(a)(b) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 49(3), 89 (with Sch. 8 paras. 90-96)
F12Words in s. 554E(4)(a)(b) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 136(4), 146 (with Sch. 8 paras. 147-157)
F13Words in s. 554E(4)(a)(b) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 200(4), 204 (with Sch. 8 paras. 205-215)