16A

Financial Benefits to Encourage Employee Participation

Table continued
Tax on removal of shares from plan within 3 years of award³	On market value when taken out	On market value when taken out	On market value when taken out	Original dividend taxable but in year when shares taken out of plan
Tax on removal between 3 and 5 years of award²	On lower of: value at award; and value on removal	On lower of: salary used to buy shares; and value on removal	On lower of: value at award; and value on removal	None
Tax on removal after 5 years	None	None	None	None
COT on removal—any time	None	None	None	None
¹ These conditions can be included at the option of the company. ² The holding period may be up to 5 years at the option of the company. ³ PAYE and NICs will be operated in relation to any schedule E income tax charge where the shares are readily convertible assets.
The impact of NICs where employees withdraw partnership shares within 3 years is the subject of consultation. This review has been caused by the extreme volatility of prices in the technology sector.