ETASSUM43290 - Schedule 4 Company Share Option Plan (CSOP): Shares to be used: Scheme shares subject to restrictions

In relation to Schedule 4 CSOP share options granted on or after 17 July 2013, the shares to be acquired on exercise can be subject to any restriction 바카라 사이트“ see ETASSUM47160.

A restriction attaches to a share if the share was subject to the restriction on issue by virtue of the company바카라 사이트™s Articles of Association or by authority of a special resolution of the company (or a later amendment to the company바카라 사이트™s Articles). But scheme shares may be subject to restrictions imposed other than by the Articles of Association 바카라 사이트“ see section 423(2) to (4) ITEPA.

Restrictions on scheme shares can take the form of:

  • direct restrictions on the scheme shares, or
  • additional rights given to other shares of the same class.

Restrictions attaching to shares are most commonly to be found in the section of the Articles governing share transfers but may also be found elsewhere in e.g. the scheme rules or shareholder agreements.

It must be stated at the time of grant whether or not the shares under option are subject to any restriction and if they are, the restriction must be stated (paragraph 21A(1)(c). This means that the restrictions must be identified for participants and it is not sufficient for the company to refer generally to its articles of association or a shareholder agreement, for example; it should refer the participant specifically to the restrictions and where, for example these are located within the articles of association or shareholder agreement, which must be readily available and easily accessible to the participants.

Restrictions notified in accordance with HMRC바카라 사이트™s ESSUM/ETASSUM guidance in force at the time of particular option grants will be considered to have been notified to optionholders in a manner acceptable to HMRC.

In the case that restrictions are omitted from grant documentation, HMRC will take into consideration for compliance purposes any evidence that the restrictions have been otherwise brought to a Participant바카라 사이트™s attention in a meaningful way at or near the date of option grant.

Failure to notify a trivial restriction will not be a compliance issue.

If new or revised restrictions are applied to the shares after options have been granted, details of those restrictions must be provided to optionholders as soon as practicable. Care should be taken to ensure that where restrictions are altered after grant, this does not result in the option losing its tax advantaged status (refer to ETASSUM44120 & ETASSUM46140).