Income Tax (Earnings and Pensions) Act 2003 section 51

Accumulation periods

Section 51 sets out the rules governing accumulation periods within a share incentive plan's partnership share arrangements, including their maximum length, timing requirements, and how corporate transactions affecting the shares are handled.

• A share incentive plan may include accumulation periods of up to 12 months, during which partnership share money is deducted from salary before shares are purchased
• Partnership share agreements must specify when each accumulation period begins and ends, and may also provide for an accumulation period to end early on the occurrence of a specified event
• The first accumulation period must start no later than the date of the first deduction of partnership share money, and the same accumulation period must apply to all participants for each award of partnership shares
• If a corporate transaction during an accumulation period results in a new holding of shares being treated as equivalent to the original holding for capital gains tax purposes, the plan may provide that the agreement switches to the new shares, provided the employee consents