Income Tax (Earnings and Pensions) Act 2003 section 52

Application of money deducted in accumulation period

Section 52 deals with how partnership share money deducted during an accumulation period must be applied by trustees to acquire shares, and how the number of shares awarded to the employee is determined.

• Partnership share money deducted during each accumulation period must be used by trustees to buy partnership shares for the employee on the acquisition date, which must be no later than 30 days after the end of the accumulation period.
• The partnership share agreement must specify one of three methods for determining how many shares the employee receives: the lower of market value at the start of the accumulation period or on the acquisition date; market value at the start of the accumulation period only; or market value on the acquisition date only.
• Any surplus money remaining after shares are acquired may be carried forward to the next accumulation period with the employee's agreement, or otherwise must be paid to the employee as soon as practicable.
• If the employee leaves relevant employment during an accumulation period, or if the accumulation period ends due to a specified event, the deducted money must be returned to the employee as soon as practicable rather than being used to buy shares.