Introduction Details of the Schedule Part 1, Retirement of Participants
4.Paragraph 1 introduces amendments to the rules in Part 7 of ITEPA governing when employees are entitled to favourable tax treatment when they leave employment on retirement or after reaching a specified age. The changes will harmonise retirement rules across SIP, SAYE and CSOP, to allow businesses offering these schemes to align the definition of 'retirement' with their broader policy in this area.
5.Paragraphs 2 - 6 remove the requirement for a SIP scheme to include a 'specified retirement age' in the scheme rules, and make consequential changes.
6.Paragraphs 7 - 13 remove the requirement for an SAYE scheme to include a 'specified age' for retirement in the scheme rules, and repeal the provision allowing exercise of options by those who reach the 'specified age' without retiring.
7.Paragraphs 14 - 15 remove the requirement for a CSOP scheme to specify a retirement age in the scheme rules, where these provide for exercise of the CSOP options on retirement.
8.Paragraph 16 provides that the change under paragraph 11 (the repeal of the current provision in paragraph 33 of Schedule 3 allowing exercise of SAYE options by those who reach the 'specified age' without retiring) does not apply to options granted before Royal Assent. These options can therefore still be exercised with favourable tax treatment where the participant reaches the specified age without retiring.
9.Paragraph 17 provides that other changes in Part 1 have effect from the date the legislation receives Royal Assent, and SIP, SAYE and CSOP schemes approved before these changes take effect are to be treated as if relevant provisions included the modifications made by these paragraphs.
10.Sub-paragraphs (2) and (3) of paragraph 17 introduce a modification in the case of free and matching SIP shares awarded before the date these changes take effect. Any provision within a SIP allowing for forfeiture will not apply to these free and matching shares where the employee retires.