Commentary on Sections Example 3 Ne = £5,000; Da = 183; De = 183; Smg = 0 Section 534: Disqualifying events relating to relevant company
2166.This section sets out those events that can happen to the company whose shares are the subject of a qualifying option that would lead to that share option ceasing to qualify under EMI. These are “disqualifying events”. It derives from paragraph 47(1) and (2) and paragraph 48 of Schedule 14 to FA 2000.
2167.The word “being” has been changed to “becoming” in subsection (1)(b) to better match the wording and meaning of subsection (1)(a).
2168.The definition of “control” is covered by section 840 of ICTA, see Note 51 in Annex 2.
2169.In subsection (4), which derives from paragraph 47(2) of Schedule 14 to FA 2000, the reference to the “original” option has been dropped from the phrase “when the option was granted”. There is no scope in paragraph 47(2)(b)(ii) of Schedule 14 to FA 2000 to refer to any option other than the qualifying option, mentioned in paragraph 47(2)(a) (in subsections (3) and (4)(a) of this section). This could be either an original or a replacement option. Also the words “of a group” no longer follow “parent company” in subsection (4)(b).
2170.To clarify the position if there has been a replacement option, there is a cross-reference to paragraph 41(5) (b) of Schedule 5.
2171.The words “from the grant” in the source legislation have been changed to “the period of two years after the date” of the grant in subsection (5) to clarify the rule. This new wording provides for a period exclusive of the date of the grant.