Minutes of meeting between HMRC and the Share Plans Lawyers on 17 January 1991

Note of meeting with Inland Revenue Inspectors (Peter Stokes, Martin Fletcher and Linda Grant) on 17 January 1991 together with follow-up correspondence from the Inland Revenue (2 letters) dated 6 February 1991. At the meeting the following matters were considered:

  • Approved CSOP:alteration of the conditions for exercise of options after the date of grant; effect of the receipts basis on the calculation of “relevant emoluments”; and grant of options within the limits set out in the relevant legislation;
  • Approved Option Schemes (CSOP and SAYE):Shares Valuation – agreed practice for fixing of market value of shares; surrender and re-grant of options and the documentation required and tax consequences; full-time director and employment within a group; SVD approved calculation for the adjustment of options in the event of discounted rights issue; registration of shares allotted to individuals in a broker’s name; and amending a scheme to allow options to subscribe to be expressed as options over existing shares;
  • Profit Sharing Schemes (APS):similar terms test; linkage between profit sharing schemes and cash bonus schemes; employees being able to acquire shares without high cash commitment and five Inland Revenue requirements and use of PEPs;
  • All schemes: Takeover Code directors of target company have duty to provide advice to optionholders on merits of proposals but not allowed to make reference to cash cancellation proposal.Associated Correspondence: deals with advice to approved scheme participants regarding cash cancellation proposal required under Takeover Code.
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Keywords: Cash alternative, Cash award, Cash bonus, Cash cancellation, CGT, Discretion, HMRC compliant plans, Income tax, IPO, Performance condition, Personal Equity Plan, Profit Sharing Scheme, Rights issue, Share valuation, Takeover, Takeover Code
Categories: Document archive, HMRC meetings