Part 9

Special rules about settlements and trustees
Chapter 5

Share incentive plans

“The applicable period” in relation to shares
489
1
This section sets out how the applicable period in relation to any shares (“the relevant shares”) is determined for the purposes of section 488.
2
The length of the applicable period depends on whether any shares in the relevant company were readily convertible assets at the time the relevant shares were acquired by the trustees.
3
If any were, the applicable period is the period of two years beginning with the acquisition date.
4
If none were, the applicable period is—
a
the period of 5 years beginning with the acquisition date, or
b
if within that period any shares in the relevant company become readily convertible assets, the period of two years beginning with the date on which they did so,
whichever ends first.
5
Subsections (2) to (4) are subject to subsection (6).
6
If the relevant shares were acquired by the trustees by virtue of a payment in respect of which a deduction is allowed under section 989 of CTA 2009 (deduction for contribution to plan trust), the applicable period is the period of 10 years beginning with the acquisition date.
7
In this section—
- “the acquisition date” means the date on which the trustees acquired the relevant shares,
- “readily convertible assets” has, subject to subsection (8), the meaning given by sections 701 and 702 of ITEPA 2003, and
- “the relevant company” means the company in which the relevant shares are shares.
8
In determining for the purposes of this section whether shares are readily convertible assets, ignore any market for the shares that—
a
is created by virtue of the trustees acquiring shares for the purposes of the Schedule 2 share incentive plan, and
b
exists solely for the purposes of that plan.
Words in s. 489(8)(a) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 72, 89 (with Sch. 8 paras. 90-96)
Words in s. 489(6) substituted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 702 (with Sch. 2 Pts. 1, 2)