Section 42 | Approved share incentive plans

(1)Paragraph 84(1) of Schedule 2 to ITEPA 2003 (approved share incentive plans) is amended as follows.

(2)For paragraph (d) substitute—

(d)an alteration being made—

(i)in the share capital of a company any of whose shares are subject to the plan trust, or

(ii)in the rights attaching to any shares of such a company,

that materially affects the value of shares that are subject to the plan trust;

.

(3)In paragraph (e), for “have been awarded to participants” substitute “ are subject to the plan trust ”.

(4)Section 989 of CTA 2009 (deduction for contribution to plan trust) is amended as follows.

(5)In subsection (1), after paragraph (a) insert—

(aa)the payment is not made pursuant to tax avoidance arrangements,

.

(6)After subsection (6) insert—

(6A)For the purposes of this section the payment mentioned in subsection (1)(a) is made pursuant to tax avoidance arrangements if—

(a)it is made pursuant to arrangements entered into by the paying company, and

(b)the main purpose, or one of the main purposes, of the paying company in entering into the arrangements was to obtain a deduction or an increased deduction.

(6B)In subsection (6A) “arrangements” includes any arrangements, scheme or understanding of any kind, whether or not legally enforceable, involving a single transaction or two or more transactions.

(7)The amendments made by subsections (1) to (3) have effect in relation to events taking place on or after 24 March 2010.

(8)The amendments made by subsections (4) to (6) have effect in relation to payments made on or after that day.