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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: Permitted restrictions - Forfeiture

Partnership shares and dividend shares can never be subject to forfeiture (Paragraphs 43(2)(a) and 65(1)(b)). Forfeiture means a provision to the effect that a participant ceases to be beneficially entitled to shares on the occurrence of certain events (paragraph 99(1)).

Partnership shares and dividend shares may be subject to provision requiring the partnership (paragraph 43(2B)) or dividend shares (paragraph 65(2)) acquired on behalf of an employee to be offered for sale, but only if certain requirements are met (see ETASSUM24390 and ETASSUM24750).