Taxes Consolidation Act 1997 Schedule 12A, paragraph 8

Eligibility

Paragraph 8 of Schedule 12A sets out the eligibility restrictions that prevent a person with a material interest in a close company from participating in an approved share option scheme.

• A person who has, or has had within the preceding 12 months, a material interest in the relevant close company (or a company controlling or consorting to own it) cannot participate in the scheme.
• The definition of close company extends to non-resident companies and to quoted companies that would otherwise be treated as close under sections 430 and 431.
• A material interest means the ability, alone or together with associates, to control 15 per cent or more of the company's ordinary share capital.
• The definition of associate is modified so that the usual 5 per cent threshold in section 433 is replaced by 15 per cent, and in a group scheme, all participating companies are taken into account.