Income Tax (Earnings and Pensions) Act 2003 Schedule 2 paragraph 3

Matching shares

Schedule 2 paragraph 3 explains how a Share Incentive Plan (SIP) can provide matching shares to employees in proportion to partnership shares they have acquired, and how companies can control the timing of different share provisions within the plan.

• A SIP that includes partnership shares may also provide for matching shares to be given to employees at no cost, in proportion to the partnership shares they acquire.
• Matching shares are additional shares appropriated to employees without payment, linked directly to the number of partnership shares obtained.
• A SIP may include provisions for free shares, partnership shares, and matching shares, either individually or in combination.
• Where a plan includes all or more than one type of share, the company may decide when the rules for each type of share take effect.