Income Tax (Earnings and Pensions) Act 2003 section 12

No loan arrangements

Section 12 prohibits any connection between a share incentive plan and loan arrangements made available to employees.

• The plan must not include any provision for loans to some or all employees of the company, or of any constituent company in a group plan.
• The plan must not be associated in any way with any separate provision for such employee loans.
• The day-to-day operation of the plan must also not be linked to any employee loan arrangements.
• "Arrangements" is defined broadly to include any scheme, agreement, undertaking or understanding, whether or not it is legally enforceable.