Commentary on Sections Overview Part 6: Requirements etc. relating to share options Paragraph 28: Requirements as to price for acquisition of shares
3317.This paragraph derives from paragraph 25 of Schedule 9 to ICTA; and contains the rule that the exercise price for the option must be not less than 80% of the market value of the shares at the time of the grant of the option. Sub-paragraph (2) allows this price to be fixed in advance of the grant if agreed between the Inland Revenue and the scheme organiser.
3318.The decision was taken to retain “manifestly” in sub-paragraph (1). The word is interpreted to mean variations of “evidently”, “clearly” and “obviously”.
3319.Sub-paragraph (3) extends the scope for changes, which are permitted to occur as a result of a variation in the share capital. Paragraph 25 of Schedule 9 to ICTA refers only to price, but in reality the number and description of the shares may be affected. This and the necessity of getting Inland Revenue approval in advance (sub-paragraph (4)) have been recognised in practice. See Change 169 in Annex 1.