Income Tax (Earnings and Pensions) Act 2003 section 9

Participation on same terms

Section 9 requires that all employees invited to participate in a Share Incentive Plan award must be invited on the same terms, and must actually participate on the same terms.

• Every employee invited to participate in an award must be invited and must actually participate on the same terms as all other participants.
• Free shares may only be awarded by reference to remuneration, length of service, or hours worked — no other factors are permitted.
• Where more than one of these permitted factors is used, each must generate a separate entitlement and the total entitlement must be the sum of those separate amounts.
• The same-terms rule is not breached for partnership shares merely because a percentage cap on deductions produces different deduction amounts or share numbers for employees on different pay levels.