Finance Act 1996

Section 114.

SCHEDULE 16 Share option schemes approved before passing of this Act

Preliminary

1 (1) Subject to sub-paragraphs (2) and (3) below, this Schedule applies to any share option scheme approved by the Board before the day on which this Act is passed in consequence of their being satisfied that the scheme fulfils the requirements of Part IV of Schedule 9 to the Taxes Act 1988 (as well as such requirements of Parts I and II of that Schedule as apply in relation to the scheme).

(2) This Schedule shall not apply to a share option scheme if, before the end of 1996, the grantor gives notice to the Board that it is not to apply.

(3) Where a notice is given to the Board under sub-paragraph (2) above, the scheme shall, with effect from the day on which the notice is given, cease to be approved.

Limit on aggregate value of options

2 (1) A scheme to which this Schedule applies shall have effect, notwithstanding anything included in it to the contrary, as if it provided that no person shall, on or after the day on which this Act is passed, obtain rights under it which would, at the time they are obtained, cause the aggregate market value of the shares which that person may acquire in pursuance of rights obtained under the scheme or under any other share option scheme, not being a savings-related share option scheme, approved under Schedule 9 to the Taxes Act 1988 and established by the grantor or an associated company of the grantor (and not exercised) to exceed or further exceed £30,000.

(2) Sub-paragraph (3) of paragraph 28 of Schedule 9 to the Taxes Act 1988 (market value of shares to be calculated as at time when rights obtained etc) shall have effect for the purposes of sub-paragraph (1) above as it has effect for the purposes of sub-paragraph (1) of that paragraph.

Price at which scheme shares may be obtained

3 A scheme to which this Schedule applies shall have effect, notwithstanding anything included in it to the contrary, as if it provided that the price at which scheme shares may be acquired by the exercise of a right obtained, on or after the day on which this Act is passed, under the scheme must not be manifestly less than the market value of shares of the same class at that time or, if the Board and the grantor agree in writing, at such earlier time or times as may be provided in the agreement.

Approval of the Board to alterations

4 For the purposes of paragraph 4 of Schedule 9 to the Taxes Act 1988 (approval not to have effect from the date of any alteration in the scheme unless the Board have approved the alteration) the alterations made by paragraphs 2 and 3 above in any scheme to which this Schedule applies shall be taken to have been approved by the Board before the day on which this Act is passed.

Interpretation

5 (1) Section 187 of the Taxes Act 1988 (interpretation of sections 185 and 186 and Schedules 9 and 10) applies for the purposes of this Schedule as it applies for the purposes of sections 185 and 186 of, and Schedules 9 and 10 to, that Act.

(2) In this Schedule “scheme shares” has the same meaning as in Part IV of Schedule 9 to the Taxes Act 1988.