Income Tax (Earnings and Pensions) Act 2003 section 53

Restriction on number of shares awarded

Section 53 deals with the company's ability to set a maximum number of shares that can be included in a partnership share award, and the rules that apply when such a maximum is set.

• The plan may authorise the company to specify an "award maximum" — the maximum number of partnership shares included in any given award — and different maximums may be set for different awards.
• Partnership share agreements must include a company undertaking to notify employees of any restriction on the number of shares in an award.
• Notice of the restriction must be given before the relevant deduction of partnership share money (where there is no accumulation period) or before the start of the accumulation period (where there is one).
• Where the award maximum is lower than the number of shares that would otherwise be awarded, the number of partnership shares acquired for each employee must be reduced proportionately.