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ETASSUM22130 | Schedule 2 Share Incentive Plan (SIP): Eligibility: Qualifying periods

From HM Revenue & Customs · Employee Tax Advantaged Share Scheme User Manual

The rules of a Schedule 2 SIP may specify a qualifying period of service before employees can participate in the plan. The maximum length of a qualifying period depends on the type of award:

  • for free shares - up to 18 months before the date of the award (paragraph 16(2)),

  • for partnership and matching shares with no accumulation period (paragraph 50) - up to 18 months leading up to the deduction of the partnership share money for the award (paragraphs 16(3) & (5)), and

  • for partnership and matching shares with an accumulation period (paragraph 52) - up to 6 months before the start of the accumulation period in question (paragraphs 16(4) & (6)).

Different qualifying periods can be set for different awards of shares, but within each award all employees must be subject to the same qualifying period.

If a qualifying period is set for an award, every participant must have been an employee of a qualifying company (see ETASSUM22140) at all times during the qualifying period.