Income Tax (Earnings and Pensions) Act 2003 section Sch 2 para 16

Qualifying periods

Section Sch 2 para 16 sets out the maximum qualifying periods that a Share Incentive Plan (SIP) may impose before employees become eligible for different types of share awards.

• Free shares and partnership shares (without an accumulation period) may have a qualifying period of up to 18 months, ending on the award date or the date partnership share money is deducted respectively.
• Partnership shares with an accumulation period, and matching shares linked to such partnership shares, may have a qualifying period of up to 6 months, ending at the start of the accumulation period.
• Matching shares without an accumulation period follow the same 18-month maximum as partnership shares, ending when the related partnership share money is deducted.
• The same qualifying period must apply consistently to all employees of the company (or all constituent companies in a group plan), although the company may set different qualifying periods for different awards provided all the maximum limits are respected.