Finance Act 2014

Income Tax (Earnings and Pensions) Act 2003 U.K.

19 (1) Paragraph 27 of Schedule 2 to ITEPA 2003 (share incentive plans: requirement as to listing etc) is amended as follows. U.K.

(2) In sub-paragraph (1), omit the “or” at the end of paragraph (b) and after that paragraph insert—

“(ba) shares in a company which is subject to an employee-ownership trust, or”.

(3) After sub-paragraph (2) insert—

“(3) But a company is not a close company for the purposes of sub-paragraph (2) if it is subject to an employee-ownership trust.

(4) A company (“C”) is “subject to an employee-ownership trust” if—

(a) C meets the trading requirement set out in section 312D,

(b) C meets the indirect employee-ownership requirement,

(c) neither C, nor any other company which is a member of the same group of companies as C, is a service company, and

(d) C is not under the control of another company (ignoring for this purpose another company acting in its capacity as the trustee of the settlement by virtue of which C meets the indirect employee-ownership requirement).

(5) Section 312E (the indirect employee-ownership requirement) applies for the purposes of sub-paragraph (4), subject to the following modifications—

(a) subsection (3) of that section has effect as if—

(i) the words “during the qualifying period” were omitted, and

(ii) in paragraph (a) for “10 December 2013” there were substituted “ 1 October 2014 ”, and

(b) subsection (4) has effect as if for paragraph (b) there were substituted—

“(b) section 236L of that Act applies as if the reference in subsection (1)(c) of that section to the period of 12 months ending with the time in question were a reference to any time on or after 1 October 2014.”

(6) Section 312G (meaning of “service company”) applies for the purposes of sub-paragraph (4)(c), subject to the following modifications—

(a) in subsection (3)(b), the reference to the company which makes the payment is to be read as a reference to C,

(b) in subsection (4)(a), the reference to the time the payment is made is to be read as a reference to any time, and

(c) in subsection (4)(b), the reference to any time before the time the payment is made is to be read as a reference to any time.”

(4) The amendments made by this paragraph come into force on 1 October 2014.

20 (1) Paragraph 19 of Schedule 3 to ITEPA 2003 (SAYE option schemes: requirements as to listing) is amended as follows. U.K.

(2) In sub-paragraph (1), omit the “or” at the end of paragraph (b) and after that paragraph insert—

“(ba) shares in a company which is subject to an employee-ownership trust (within the meaning of paragraph 27(4) to (6) of Schedule 2), or”.

(3) After sub-paragraph (2) insert—

“(3) But a company is not a close company for the purposes of sub-paragraph (2) if it is subject to an employee-ownership trust (within the meaning of paragraph 27(4) to (6) of Schedule 2).”

(4) The amendments made by this paragraph come into force on 1 October 2014.

21 (1) In paragraph 17 of Schedule 4 to ITEPA 2003 (CSOP schemes: requirements as to eligible shares), in sub-paragraph (1), omit the “or” after paragraph (a) and after paragraph (b) insert “, or U.K.

(ba) shares in a company which is subject to an employee-ownership trust (within the meaning of paragraph 27(4) to (6) of Schedule 2).”

(2) The amendment made by this paragraph come into force on 1 October 2014.

22 (1) In paragraph 9 of Schedule 5 to ITEPA 2003 (enterprise management incentives: the independence requirement), after sub-paragraph (4) insert— U.K.

“(5) But the independence requirement is treated as met if the company is subject to an employee-ownership trust (within the meaning of paragraph 27(4) to (6) of Schedule 2).”

(2) The amendment made by this paragraph comes into force in accordance with provision contained in an order made by the Treasury.

(3) Section 1014(4) of ITA 2007 (orders etc subject to annulment) does not apply in relation to an order under sub-paragraph (2).

Commencement Information

I1 Sch. 37 para. 22(1) in force at 1.10.2014 for the purposes of the amendment made by that sub-paragraph by S.I. 2014/2461, art. 2