Part 11: Supplementary provisions
3202.It was mentioned, in the overview to the explanatory notes for this Schedule, that the contents of this Schedule could be divided into three categories. Parts 2 to 9 of this Schedule deal with the first category (the requirements that must be met before a SIP may be “approved” for the purposes of the SIP code) and Part 10 with the second category (procedural matters). This is the eleventh and final Part of this Schedule, and deals with the third category (supplementary provisions). This Part of this Schedule is derived from material in Part 13 of Schedule 8.
Paragraph 86: Company reconstructions
3203.This paragraph deals with company reconstructions, and is the first of two that derive from paragraph 115 of Schedule 8. This paragraph derives from sub-paragraphs (1) and (2) of paragraph 115, and deals with the meaning of the expression “company reconstruction”. The consequences of company reconstructions are dealt with in paragraph 87 of this Schedule.
3204.Sub-paragraph (3)(a) is new; and specifies the consequences of the making of what is now termed an “excluded issue of shares”. This material is not contained in the source legislation; but the new material is merely declaratory of the law in order to make those consequences explicit. See Note 67 in Annex 2.
3205.In sub-paragraph (4), the label “excluded issue of shares” is new.
Paragraph 87: Consequences of company reconstructions
3206.This paragraph deals with the consequences of company reconstructions, and is the second of two that derive from paragraph 115 of Schedule 8. This paragraph derives from sub-paragraphs (3) to (8) of paragraph 115.
3207.This paragraph presents the legislation in a somewhat different order; and, in particular, the sub-paragraph containing definitions (sub-paragraph (7)) has been placed at the end. As a result of the rewriting of the legislation contained in the SIP code, sub-paragraph (2)(d) has wording that differs from that to be found in the source legislation.
3208.In this paragraph, the label “corresponding shares” has been replaced by the label “corresponding old shares”.
Paragraph 88: Treatment of shares acquired under rights issue
3209.This paragraph contains provisions that apply where the trustees exercise rights arising under a rights issue. The paragraph derives from paragraph 116 of Schedule 8.
3210.The order in which the material is presented has been changed substantially. Sub-paragraph (1) now specifies the circumstances in which this paragraph applies; and sub-paragraph (2) now deals with the “basic” case (where the rights are exercised), leaving later sub-paragraphs to deal with other cases.
3211.In paragraph 116 of Schedule 8, paragraph 116(5) is concerned with the meaning of the expression “rights arising under a rights issue”, and provides a cross-reference to another provision in Schedule 8. This expression is now defined in paragraph 99(1) of this Schedule for the purposes of the SIP code generally.
Paragraph 89: Termination of plan
3212.This paragraph contains provisions relating to the termination of a plan; and this may be done if the company issues a plan termination notice. The paragraph derives from paragraph 120 of Schedule 8.
3213.Sub-paragraph (2) now has four paragraphs, as opposed to the corresponding provision in the source legislation which had three paragraphs, one of which had two sub-paragraphs of its own. In paragraph (d) the word “into” has been added after the word “entered”.
Paragraph 90: Effect of plan termination notice
3214.This paragraph deals with the effect of a plan termination notice. The paragraph derives from paragraph 121 of Schedule 8.
3215.The first sentence of paragraph 121(3) has been rewritten as sub-paragraph (3). The second sentence of paragraph 121(3) has, however, been omitted, on the basis that it is unnecessary.
3216.Sub-paragraph (7) has been rewritten, to bring the subject, verb and direct object of this sentence closer together.
3217.In sub-paragraph (8) the words “doing the following in the case of each participant” have been added.
3218.Sub-paragraph (9) has been amended to provide that where a participant has died, the references to a participant in the entirety of this paragraph (as opposed to sub-paragraph (8)) are to the participant’s personal representatives. See Change 165 in Annex 1.
Paragraph 91: Jointly owned companies
3219.This paragraph contains provisions that apply in the case of a jointly owned company, an expression defined in sub-paragraph (5). The paragraph derives from paragraph 127 of Schedule 8, a paragraph that has been amended by section 39(5) of FA 2002.
Paragraph 92: Determination of market value
3220.This paragraph explains how market value is determined for the purposes of the SIP code. The paragraph derives from paragraph 125 of Schedule 8.
3221.Each proposition in this paragraph now appears in its own sub-paragraph.
3222.In sub-paragraph (3), the constituent parts of the sentence have been rearranged; and this sub-paragraph concludes with a reference to agreed matters “stated” in the agreement.
Paragraph 93: Power to require information
3223.This paragraph is concerned with information powers. It derives from paragraph 117 of Schedule 8.
3224.Sub-paragraph (1) reorganises the material in paragraph 117(1). The reorganisation includes the addition of paragraphing.
3225.Sub-paragraph (3) has been redrafted, with a view to clarifying the period within which information must be provided.
3226.Paragraph 117(4) of Schedule 8 has not been rewritten in this Schedule. The matter dealt with in that sub-paragraph, the addition of an entry in the table in section 98 of TMA 1970, is dealt with by means of consequential amendment to that section in Schedule 6 to this Act.
Paragraph 94: Meaning of “associated company”
3227.This paragraph explains the meaning of the expression “associated company” for the purposes of the SIP code. The paragraph derives from paragraph 126 of Schedule 8. The words “at a given time” have been added in sub-paragraph (1).
Paragraph 95: Meaning of participant ceasing to be in relevant employment
3228.This paragraph explains the meaning of a participant ceasing to be in relevant employment for the purposes of the SIP code. The paragraph derives from paragraph 123 of Schedule 8.
3229.The words “for the purposes of the SIP code” have been added in sub-paragraphs (1) and (2); and the word order has been changed in sub-paragraph (3).
Paragraph 96: Meaning of shares being withdrawn from plan
3230.This paragraph explains when shares are withdrawn from a plan for the purposes of the SIP code.
3231.This paragraph is the first of two that derive from paragraph 122 of Schedule 8. That paragraph is lengthy, and with a view to making its provisions more accessible, it has been divided for the purposes of this Act. This paragraph derives from sub-paragraphs (1) and (2) of paragraph 122.
Paragraph 97: Meaning of shares ceasing to be subject to plan
3232.This paragraph explains when shares cease to be subject to a plan for the purposes of the SIP code.
3233.This paragraph is the second of two that derive from paragraph 122 of Schedule 8, deriving in this case from sub-paragraphs (3) to (5) and (7) of that paragraph. (Paragraph 122(6) of Schedule 8 has been rewritten as section 508.)
3234.Sub-paragraph (2) derives from paragraph 122(4) of Schedule 8. This material has been reorganised, and paragraphs have been added.
Paragraph 98: Meaning of "the specified retirement age"
3235.This paragraph provides for a new definition (that of “the specified retirement age”) to apply for the purposes of the SIP code. This new provision derives from paragraph 87(4) of Schedule 8.
Paragraph 99: Minor definitions
3236.This paragraph contains minor definitions. It derives from paragraph 129 of Schedule 8.
3237.In sub-paragraph (1), amendments have been made to the detail of the wording of the definition of “plan shares”.
3238.The definition of “provision for forfeiture” is now in sub-paragraph (1), having been moved from paragraph 65(6) of Schedule 8.
3239.The definition of “redundancy” is also now in sub-paragraph (1), having been moved from paragraph 87(3) of Schedule 8.
3240.There is also a new definition of “rights arising under a rights issue” in sub-paragraph (1). This definition brings together the partial definitions that may be found in different places in Schedule 8.
3241.The definition of “foreign cash dividend”, which may be found in paragraph 129(1) of Schedule 8, has been removed. That definition is used only once (see paragraph 75 of this Schedule), and is dealt with there.
Paragraph 100: Index of defined expressions
3242.This paragraph consists of an index of expressions defined or explained for the purposes of the SIP code. It is in the same form as the index in paragraph 130 of Schedule 8.
