534Disqualifying events relating to relevant companyU.K.
(1)The following events relating to the relevant company are disqualifying events in relation to a qualifying option—
(a)when the relevant company becomes a 51% subsidiary of another company;
(b)when the relevant company comes under the control of—
(i)another company, or
(ii)another company and any other person connected with that other company,
without becoming a 51% subsidiary of that other company;
(c)when the relevant company ceases to meet the trading activities requirement (see paragraphs 13 to 23 of Schedule 5).
(2)But where a replacement option has been granted, an event within subsection (1)(a) or (b) is not a disqualifying event in relation to the old option (see paragraph 41(2) of Schedule 5) if the event occurs at any time during the period—
(a)beginning at the same time as the period within which the replacement option had to be granted (see paragraph 42 of Schedule 5), and
(b)ending with the release of the rights under the old option.
(3)A disqualifying event is to be treated as occurring in relation to a qualifying option if the circumstances mentioned in subsection (4) arise.
(4)The circumstances are that—
(a)the relevant company was a qualifying company at the time when the option was granted as a result only of preparations to carry on a qualifying trade; and
(b)either—
(i)the preparations cease to be carried on, or
(ii)the initial period comes to an end,
without the relevant company (or, if it is a parent company, any member of the group) beginning to carry on that qualifying trade.
(5)“The initial period” means the period of two years after the date when the option was granted.
(6)Paragraph 41(5)(b) of Schedule 5 has the effect that a replacement option is to be treated as granted on the date when the original option was granted.
[F1(7)Subsection (1)(a) and (b) do not apply where the relevant company is subject to an employee-ownership trust (within the meaning of paragraph 27(4) to (6) of Schedule 2).]
Textual Amendments
F1S. 534(7) inserted (retrospective to 1.10.2014) by Finance Act 2016 (c. 24), Sch. 3 para. 1