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HMRC internal manual

Employee Tax Advantaged Share Scheme User Manual

HM Revenue & Customs
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Schedule 2 share incentive plan (SIP): Shares that may be awarded: Eligible shares

A Schedule 2 SIP must provide for employees to acquire shares (‘eligible shares’) which satisfy the requirements of paragraphs 26 to 29 Schedule 2 ITEPA 2003. 

Tax relief will only be given in respect of awards of shares which satisfy the relevant requirements. The company establishing the SIP must therefore ensure that the Plan rules define the eligible shares precisely so as to be able to self-certify that the SIP meets the requirements of schedule 2 (see ETASSUM11300):

  • The plan documents must define the eligible shares precisely, such as ‘Ordinary £1 shares in X Ltd which satisfy paragraphs 26-29 Schedule 2’. Where there is only one class of share it would be acceptable to say “ordinary shares which satisfy paragraphs 26-29 etc.”.