Income Tax (Earnings and Pensions) Act 2003 section 73

Duty not to dispose of plan shares

Section 73 sets out the restrictions on trustees disposing of a participant's free, matching or dividend shares during the holding period under a Share Incentive Plan.

• The rule applies to free shares, matching shares and dividend shares held in the plan on behalf of a participant.
• Trustees are prohibited by the trust instrument from disposing of these shares during the holding period, unless the participant has left relevant employment.
• Exceptions allow trustees to accept general offers, raise funds for rights issues, meet PAYE obligations, or remove shares early on plan termination with the participant's consent.
• These restrictions ensure shares are retained in the plan trust for the required period, preserving the intended tax advantages for the participant.