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HMRC internal manual

Employee Tax Advantaged Share Scheme User Manual

HM Revenue & Customs
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Schedule 4 Company Share Option Plan (CSOP): Eligibility of individuals to participate: The "no material interest" requirement: Interests in Share Incentive Plans (SIPs)

If any of the company’s shares are held by the trustees of a Share Incentive Plan for the employee or his associate they must be taken into account for the purposes of the material interest test; they are beneficially owned by the employee or associate. This is the case if the shares:

  • were appropriated as “plan shares” to the individual under the rules of the SIP, or
  • are held on a bare trust before being distributed to the individual as beneficial owner.

Any un-appropriated shares which the trustees are holding for the purposes of the SIP are not to be attributed to the employee or his associate for the material interest test. These shares are still counted as part of the ordinary share capital of the company, however.