| Financial Benefits to Encourage Employee Participation |
41 |
16A.8.2.2.3 Shares The shares must be part of the fully paid up ordinary share capital of the grantor company (or certain controlling companies)168 and must be (a) quoted on a recognised stock exchange, or (b) shares in a company not under the control of another company unless the controlling company is quoted (and is not a close company).169 The only special restriction permitted170 is one imposed by the company’s articles requiring the employee or director to dispose of the scheme shares at the end of the employment.171 Conditions may also be imposed as far as they require the shares to be pledged as security for a loan to buy them, or to be disposed of in repayment of such a loan.172 There are further rules relating to the other shareholdings. The majority must be ‘employee control’ shares or ‘open market’ shares.173 |
16A.8.2.2.4 Rights The rights must be non-transferable. However, personal representatives of deceased participants may exercise rights within 1 year of death (and subject to the 10-year rule).174 |
16A.8.2.2.5 Approval The company establishing the scheme must apply for approval in writing. The Revenue may demand a wide range of information, and withdraw approval if the conditions cease to be met. The company may appeal to the Special Commissioners against such a |