Mintues of a mini meeting with the Inland Revenue on 21 April 2004 regarding:
- New reporting requirements;
- Inland Revenue source material – out-of-date material on Inland Revenue website;
- when certain gains realised by the exercise of a replacement share option where the original option was obtained before 6 April 1999 can be disregarded under Paragraph 16A, Part 9, Schedule 3 of the SSCR 2001;
- whether NICs are payable on cancellation of a capped option, or one granted in the capping period which is a rolled over option (includes worked examples);
- time of acquisition of shares meaning of “acquiring a beneficial interest” under Chapter 5;
- market value of partnerhship shares under SIPs;
- Unapproved Options – whether there is tax on grant of an option to an employee not resident and ordinarily resident at the time of grant and whether there is tax (as discharge of a notional loan) where such shares are sold;
- whether employees NICs payable in respect of shares acquired at an undervalue by non- residents and employer NICs where employer is not resident or present in the UK (considers Reciprocal Agreements and Double Contributions Conventions);
- PAYE and NICs on the sale of a business;
- Flotation issues – additional FAQs;
- transfer pricing (in particular, transfer pricing within the UK);
- implications of schemes of arrangement for SAYE schemes;
- Definition of “restricted securities” – how to determine whether a restriction reduced the market value of a share thereby making it a “restricted security”.
Attached to these minutes are the following documents which relate to Question 4 (SIP – Partnership shares): (1) extract of letter to the Inland Revenue regarding what constitutes market value; (2) extract of letter to the Inland Revenue and the Inland Revenue response together with examples of rules; (3) copy minutes of Proshare meeting on 23 October 2002 and follow-up from that meeting; and (4) examples for Question 4.