SCHEDULES
SCHEDULE 7Transitionals and savings
Part 7Employment income: F2income related to securities
Enterprise management incentives
77
1
This paragraph applies where, immediately before 6th April 2003, a share option was a qualifying option for the purposes of Schedule 14 to FA 2000 (enterprise management incentives).
2
On and after that date the share option is to be treated as a qualifying option for the purposes of the EMI code.
3
Sub-paragraph (2) has effect even if the requirements that had to be met in order for the share option, or any share option replaced by it, to be a qualifying option for the purposes of Schedule 14 to FA 2000 differed to any extent from those set out in Schedule 5.
4
In this paragraph “share option” means a right to acquire shares.
78
1
In section 535 (disqualifying events relating to employee), subsections (2) to (6) apply to the tax year 2003-04 and later tax years (in accordance with section 723(1)).
2
In Schedule 14 to FA 2000 (enterprise management incentives), paragraph 52 (disqualifying events: actual relevant working time) continues to apply in relation to April 2003 for the purpose of calculating, in accordance with sub-paragraphs (3) to (5) of that paragraph, whether a disqualifying event is to be taken to have occurred at the end of the tax year 2002-03.
3
If a disqualifying event is to be taken to have so occurred, it (like anything else which under that Schedule is a disqualifying event immediately before 6th April 2003) is a disqualifying event for the purposes of Schedule 5 to this Act.
79
1
Section 536 (other disqualifying events) has effect in relation to any alteration made to the share capital of a company before 11th May 2001 with the following modification.
2
In subsection (1), for paragraphs (b) and (c) substitute—
b
any alteration to the share capital of the relevant company to which section 537 applies and is made without the prior approval of F1an officer of Revenue and Customs ;
80
1
Section 537 (alteration of share capital for purposes of section 536) has effect in relation to any alteration made to the share capital of a company before 11th May 2001 with the following modifications.
2
In subsection (1), omit “and (c)”.
3
In subsection (2), substitute “
This section
”
for “This subsection”.
4
Omit subsection (3).
81
In a case where the qualifying option was granted before 6th April 2003, section 540(2) (no charge on acquisition of shares as taxable benefit) applies in relation to the time when the option was granted with the substitution of “the employee was chargeable to tax under Case I of Schedule E” for the words from “the earnings” onwards.
82
1
This paragraph relates to the operation of section 541(2) (effects on tax charges where shares cease to be conditional only or are converted) in relation to an FA 2000 option which was exercised before 6th April 2003.
2
The references to a qualifying option include an FA 2000 option which was so exercised; but in relation to such an option sub-paragraph (3) applies instead of section 541(3).
3
For the purposes of section 541(2) “the amount of relief on the exercise of the option” means the difference between—
a
the amount on which tax would have been chargeable under section 135 of ICTA (charge on exercise etc. of option) in respect of the exercise of the option apart from Schedule 14 to FA 2000 (enterprise management incentives), and
b
the amount (if any) in fact so chargeable in accordance with that Schedule.
4
In this paragraph an “FA 2000 option” means a qualifying option for the purposes of Schedule 14 to FA 2000.
83
In Schedule 5 (enterprise management incentives), paragraph 41(6) (like other provisions of that paragraph) applies to replacement options whenever granted.
Words in Sch. 7 Pt. 7 heading substituted (10.7.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 46(4)