Can someone please put the words of section 534(2) of ITEPA 2003 into plain English, ie explain the circumstances in which it might apply.
The way I read it, 534(1)(a) and (b) aren't disqualifying events if you replace the option in accordance with paras 41 and 42 of Schedule 5. I think that's what it's getting at.
Not really the answer I was looking for, but thanks for trying.
You sound disappointed with my plain English.
Not so much the plain English but lack of an example as to where the legislation might apply.
I read it as:
Employee has EMI option in Co A
Co A becomes a sub of Co B (either from 3rd party purchase or reorganisation) & therefore s534(1) relevant
But Employee receives replacement EMI option in Co B
'New'/replacement EMI option has to meet the necessary requirements
HMRC give requirements in ETASSUM55030.
Hopefully that's what you were looking for?
If A becomes sub of B a replacement option needs to be granted (or the existing one exercised). The legislation in question then seems to contemplate a further disqualifying takeover event, eg B becomes sub of C. (The first event that triggers the start of the replacement period can’t be the same event that happens during that period.)
So surely such a subsequent event should only have a potential impact on the replacement option and not the old option?
Clearly the legislation must have some intended purpose but I can’t see it.