Taxes Consolidation Act 1997 Schedule 11 paragraph 10

Requirements for shares to qualify

Paragraph 10 of Schedule 11 sets out the share requirements that must be met for shares to qualify under an approved profit sharing scheme, including the limited circumstances in which disposal restrictions imposed by a company's articles of association are permitted.

• Scheme shares must be fully paid up, non-redeemable, and free from any restrictions that do not apply equally to all shares of the same class.
• For schemes approved on or after 10 May 1997, the company's articles of association may require employees or directors to dispose of their shares on leaving the company, and may require former employees or directors who acquire scheme shares to dispose of them on acquisition, without disqualifying the shares.
• These permitted restrictions apply only where the disposal is a cash sale on terms set out in the articles, and the articles contain equivalent general provisions applying to all shares of the same class.
• A participant cannot be compelled, before the release date, to dispose of a beneficial interest in shares whose ownership has not yet been transferred to him or her by the trustees.