Income Tax (Earnings and Pensions) Act 2003 section 86

Share incentive plans

Section 86 deals with the capital gains tax treatment when shares are transferred from the trustees of an approved profit sharing scheme to the trustees of an approved share incentive plan.

• When trustees of an approved share incentive plan acquire shares from trustees of an approved profit sharing scheme, the transfer is treated as taking place at a value that produces no capital gain or loss.
• For capital gains tax purposes, the share incentive plan trustees are treated as having acquired the shares at the same time the profit sharing scheme trustees originally acquired them.
• An approved profit sharing scheme is one approved under Schedule 9 to the Income and Corporation Taxes Act 1988.
• An approved share incentive plan is one approved under Schedule 2 to the Income Tax (Earnings and Pensions) Act 2003.