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HMRC internal manual

Employee Tax Advantaged Share Scheme User Manual

Schedule 2 share incentive plan (SIP): Shares that may be awarded: Depository receipts

In principle there is no objection to depository receipts (DRs) being used in a Schedule 2 SIP. The potential difficulty is that the precise detail of the arrangements making up the DRs may vary but generally the holder of the DR will retain the rights attaching to the ownership of the shares, such as voting and rights to receive dividends. The DR certificate will normally state the responsibilities of the depository bank with respect to the ownership of the shares.

It is acceptable for shares to be held as DRs in the trust provided that participants are able to receive ordinary shares when they withdraw plan shares from the Schedule 2 SIP.