Commentary on Sections Example 3 Ne = £5,000; Da = 183; De = 183; Smg = 0 Section 497: Limitations on charges on shares ceasing to be subject to plan
2035.This section is the first of two that deal with the tax advantages connected with shares ceasing to be subject to approved SIPs. It provides that liability to income tax only arises in specified limited circumstances when shares cease to be subject to the plan.
2036.This section brings together three general propositions contained in paragraphs 81(7), 86(6) and 93(6) of Schedule 8 to FA 2000 respectively. The opportunity has been taken to bring these three sub-paragraphs into better alignment. All three subsections now refer to “income tax” (as opposed to “tax”); and in subsection (2) the reference to “the employee” has been omitted. Paragraph 77(1) of Schedule 8 to FA 2000 may be relied on for the change to the use of the term “income tax”.