»Ê¹ÚÌåÓýapp

A Schedule 2 SIP consists of any of the items below that are relevant to meeting the requirements of Parts 2-9 of Schedule 2 ITEPA:

• the trust deed, the plan rules and the ancillary documents (free share agreement, partnership and matching share agreements) to be used in operating them;
• the provisions in the company’s Articles of Association which regulate the shares and therefore affect the operation of the SIP;
• the terms of any shareholders agreements to which shares acquired under the Schedule 2 SIP may be subject;
• any arrangements made between the SIP administrator (or the company) and the participants;
• invitation documents prepared in conjunction with the trustee or administrator.

If alterations are made to a ‘key feature� of the plan, this will need to be notified in accordance with the legislation at paragraph 81B(5). Further guidance can be found at ETASSUM27140.

»Ê¹ÚÌåÓýapp company

Paragraph 2(2) defines ‘the company� as the company which established the plan and it is that company which must notify HMRC of the Schedule 2 SIP even if the shares to be used are those of another company.

Group plans

Schedule 2 SIPs can be extended to include subsidiary companies of ‘the companyâ€� which established the plan if those companies are under the control (within the meaning of Section 719 ITEPA 2003) of the company which established the plan. »Ê¹ÚÌåÓýappse are known as ‘group plansâ€�. »Ê¹ÚÌåÓýappre is no statutory authority for extending a scheme to other companies. »Ê¹ÚÌåÓýapp company and nominated participating subsidiaries are referred to as ‘constituent companiesâ€� (paragraph 4(3)).

A Schedule 2 SIP which is established by a company which is itself a subsidiary company cannot include as constituent companies its own parent company or fellow subsidiaries.

Details of the constituent companies should be notified in the SIP annual returns. A company’s introduction as a constituent company in a group plan cannot be backdated to a time before it was formally admitted in accordance with the Deed and rules of the Schedule 2 SIP.

‘Control� has the meaning given in section 719 ITEPA 2003 and will normally include companies in which the company owns more than 50% of the shares.