Income Tax (Earnings and Pensions) Act 2003 section 97

Meaning of shares ceasing to be subject to plan

Section 97 defines the circumstances under which shares stop being subject to a Share Incentive Plan (SIP) and explains how the acquisition period is determined for partnership share awards when an employee leaves relevant employment.

• Plan shares cease to be subject to a SIP when they are withdrawn, the participant leaves relevant employment, or the trustees dispose of them to meet PAYE obligations.
• If a participant in a partnership share award leaves relevant employment during the acquisition period, they are treated as having left immediately after the shares were awarded.
• The acquisition period runs either from the deduction of partnership share money to the acquisition date (where there is no accumulation period) or from the end of the accumulation period to just before the acquisition date (where there is one).
• When a participant leaves relevant employment, their plan shares are treated as ceasing to be subject to the plan on the date they leave.

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