Part 2 General Requirements
Income Tax (Earnings and Pensions) Act 2003 (2003 c 1) | Legislation

Part 2 General Requirements

General requirements: introduction

3

A share option is not a qualifying option unless the requirements of this Part of this Schedule as to the following are met at the appropriate time—

the purpose for which the option is granted (see paragraph 4),

the maximum entitlement of an employee (see paragraphs 5 and 6),

the maximum value of the relevant company's shares in respect of which unexercised options can exist (see paragraph 7).

Purpose of granting the option

4

To be a qualifying option a share option must be granted for commercial reasons in order to recruit or retain an employee in a company, and not as part of a scheme or arrangement the main purpose (or one of the main purposes) of which is the avoidance of tax.

Maximum entitlement of employee: financial limit on unexercised options

5

(1)     An employee may not hold unexercised qualifying options which—

(a)     are in respect of shares with a total value of more than [£250,000], and

(b)     were granted by reason of the employee's employment—

(i)     with one company, or

(ii)     with two or more companies which are members of the same group of

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