Income Tax (Earnings and Pensions) Act 2003 section 489

Operation of tax advantages in connection with Schedule 2 SIP

Section 489 sets out the general scope of income tax advantages available to participants in a Schedule 2 Share Incentive Plan (SIP), and identifies the circumstances in which those advantages do not apply.

• Sections 490 to 499 provide various income tax advantages for shares awarded under a Schedule 2 SIP
• The tax advantages do not apply where the employee's earnings from the qualifying employment are not subject to UK income tax under the charging provisions in Chapters 4 or 5 of Part 2
• The "eligible employment" is the specific employment through which the individual satisfies the plan's employment requirement
• The tax advantages are withdrawn if the main purpose, or one of the main purposes, of the arrangements under which shares are awarded or acquired is the avoidance of tax or national insurance contributions