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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: Normal shares

The purpose of paragraph 28 is to ensure that the shares employees receive through a Schedule 2 SIP are normal shares on normal terms.

What is meant by normal shares is a requirement that they must be:

  • fully paid-up (paragraph 28(1)(a)) – see ETASSUM23270, and
  • not redeemable (paragraph 28(1)(b)) unless they are shares in a co-operative society – see ETASSUM23280

If the eligible shares are subject to restrictions there is a requirement for the trustees to provide details of these restrictions  in the notice of award (paragraph 75(2)(aa) & (3)(aa)). The shares  should be valued for the purposes of the SIP code as if they were not restricted.