Income Tax (Earnings and Pensions) Act 2003 section 90

Effect of plan termination notice

Section 90 sets out what happens once a company has issued a plan termination notice under a Share Incentive Plan (SIP), including the freezing of share allocations, the timeline for removing shares from the plan, and the trustees' obligations regarding shares and cash held for participants.

• Once a plan termination notice has been issued, no further shares may be allocated to or purchased on behalf of individuals under the plan.
• Trustees must remove plan shares as soon as practicable after either the end of a three-month notice period or the first date the shares can be removed without triggering an income tax charge on the participant — whichever is later.
• A participant may consent to earlier removal of their shares, but only if that consent is given after they have received a copy of the plan termination notice.
• Trustees must also return any cash held on an individual's behalf as soon as practicable after the notice is issued, and if a participant has died, their personal representatives stand in their place.