Income Tax (Earnings and Pensions) Act 2003 section 546

Meaning of being entitled "on similar terms"

Section 546 explains what "on similar terms" means when deciding whether employees' entitlements to priority share allocations qualify for the exemptions in sections 542 and 544.

• Differences in share allocations based on remuneration levels, length of service or similar factors do not automatically prevent the terms from being treated as "similar"
• Non-company employees who receive smaller allocations than company employees can still be treated as being on similar terms, provided two conditions (A and B) are both met
• Condition A requires non-company employees to also have a priority entitlement to shares in one or more other companies being offered to the public at the same time
• Condition B requires the total value of all priority share allocations for each non-company employee to be the same, or as nearly the same as reasonably practicable, as the value of shares allocated to a comparable company employee