Commentary on Sections Example 3 Ne = £5,000; Da = 183; De = 183; Smg = 0 Section 508: Identification of shares ceasing to be subject to plan
2070.This section contains provisions for identifying shares that cease to be subject to SIPs.
2071.This section derives from paragraph 122(6) of Schedule 8 to FA 2000, which is one of the supplementary provisions in Part 13 of that Schedule. It is more convenient to deal with this topic here, alongside the provisions dealing with the tax charges connected with shares ceasing to be subject to SIPs.
2072.Paragraph 122(6) of Schedule 8 is drafted in terms of shares being “awarded” to a participant; but, while it is appropriate to speak of an award of free shares, partnership shares or matching shares, it is not clear that such terminology is appropriate for dividend shares. It is, however, the intention that all shares in the trust for a particular employee should be pooled, and that shares should come out of the trust on a first in first out basis. Subsection (2) has been added to this section to deal with this point. See Change 128 in Annex 1.