Income Tax (Earnings and Pensions) Act 2003 Schedule 2 paragraph 6

General requirements for approval: introduction

Schedule 2 paragraph 6 sets out the general plan requirements that a Share Incentive Plan (SIP) must satisfy in order to qualify for tax-advantaged status.

• A SIP must meet six core plan requirements covering purpose, all-employee participation, same terms, no preferential treatment for directors or senior employees, no further conditions, and no loan arrangements
• The plan must be open to all eligible employees on the same terms, ensuring fairness across the workforce
• Directors and senior employees must not receive more favourable treatment than other participants
• The general requirements also include obligations relating to plan termination notices and associated procedures