Taxes Consolidation Act 1997 Schedule 12A paragraph 27

Options etc.

Paragraph 27 sets out how rights to acquire shares are treated when applying the material interest test that determines whether an individual is eligible to participate in an approved savings-related share option scheme.

• A right to acquire shares is treated as a right to control those shares for the purposes of the material interest test.
• Shares attributed to an individual under these rules are taken into account when checking whether the individual exceeds the permitted percentage of the company's ordinary share capital.
• Where the right relates to new unissued shares that the company is contractually bound to issue on exercise, the ordinary share capital is notionally increased by those unissued shares.
• The adjustments prevent an individual from avoiding, or artificially failing, the material interest test simply because part of their stake takes the form of options over unissued shares.