Income Tax (Earnings and Pensions) Act 2003 section Schedule 7 paragraphs 68–70

Approved share incentive plans

Section Schedule 7 paragraphs 68–70 deal with the transition of Employee Share Ownership Plans (ESOPs) to Share Incentive Plans (SIPs) from 6 April 2003, ensuring continuity of approval, preserving the validity of earlier plan provisions and share awards, and providing rules for reading cross-references between old and new legislation.

• Any ESOP approved under Schedule 8 to the Finance Act 2000 immediately before 6 April 2003 is automatically treated as an approved SIP under Schedule 2 to ITEPA 2003 from that date, even if its terms do not fully conform to the new Schedule 2 requirements.
• A plan requirement that has no equivalent in the old Schedule 8 rules cannot be treated as a disqualifying event for the purpose of withdrawing approval; however, HMRC retains the power to withdraw approval, terminate the plan, or require alterations under the new rules.
• Any provision included in the plan, or any award of shares made under it, before 6 April 2003 in accordance with Schedule 8 as then in force remains valid and is unaffected by the new legislation.
• References in any legislation, instrument or document to an ESOP are to be read as references to a SIP for periods after 5 April 2003, and vice versa for periods before 6 April 2003; additionally, a company that was a participating company in a group plan immediately before 24 July 2002 is not prevented from being a constituent company in that plan under the new jointly owned company rules.