Minutes of the annual Technical Meeting of the Share Plan Lawyers with HMRC on 12 November 1992

Minutes of a technical meeting with the Inland Revenue on 12 November 1992 regarding:

  • the operation of PAYE on cash cancellation payments on a takeover in the light of Booth v Mirror Group Newspapers plc [1992] STC 615;
  • Inland Revenue policy regarding the approved status of a scheme where arrangements approved by the Inland Revenue pursuant to paragraph 1, Schedule 9, Income & Corporation Taxes Act 1988 do not in fact fulfil the requirements of the relevant legislation;
  • the circumstances in which the Inland Revenue will accept cash payments to participants in an approved share option scheme, with reference in particular to: (1) payments to compensate for additional tax if the appproved status of the options is lost; (2) payments to compensate for foreign tax incurred on the exercise of the option; (3) cash bonus scheme where the payment can only be used in connection with the exercise of options; (4) cash top-up arrangements to compensate executives for a rise in share price following the exercise of their options; (5) cash cancellation payments made by a third party; and (6) cash payments to compensate for a loss in the value of underlying shares in the event of a demerger;
  • Inland Revenue policy regarding the extent to which it is permissible to allow directors a discretion to permit or prohibit exercise of an executive share option;
  • Inland Revenue policy on the terms of an alteration clause in an approved scheme requiring optionholder consent to scheme amendments affecting subsisting rights; and
  • general points including the revision of Inland Revenue booklets, the blue pencil provision in the Inland Revenue’s model rules regarding excessive option grants, contributions to approved profit sharing schemes and revision of the B27 concession.
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Keywords: Adjustment of options, Amending Plan Rules, Cash award, Cash cancellation, Demerger, Discretion, EBT, Good Leaver, HMRC compliant plans, Income tax, Leavers, Listing Rules, Material change, PAYE, SAYE, Shareholder approval, Takeover, Takeover Code
Categories: Document archive, HMRC meetings