Section 1022 Takeover of company whose shares are subject to option

United Kingdom

(1)

This section applies if—

(a)

a person (“P”) obtains a qualifying option to acquire shares in a company,

(b)

subsequently there is a takeover of that company,

(c)

P, by agreement with the acquiring company, releases P's rights under the qualifying option in consideration of P's obtaining another option (“the new option”), and

(d)

the new option is an option to acquire shares in a qualifying company.

Section 1023 explains what is meant by “qualifying option”, “takeover”, “the acquiring company” and “qualifying company”.

(2)

This Chapter applies as if shares acquired pursuant to the new option are acquired pursuant to the qualifying option.

(3)

The company whose shares are subject to the new option is a qualifying successor company for the purposes of paragraph (f) of condition 3 in section 1016 (condition relating to shares acquired).

(4)

In calculating the amount of any relief resulting from this section—

(a)

any consideration given in relation to the obtaining of the new option is treated as consideration given in relation to the obtaining of the qualifying option, and

(b)

any consideration given in relation to the acquisition of shares pursuant to the new option is treated as consideration given in relation to the acquisition of shares pursuant to the qualifying option.

The consideration covered by paragraph (a) does not include the consideration mentioned in subsection (1)(c).

F1(5)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Annotations

Textual amendments

F1: S. 1022(5) omitted (with effect in accordance with s. 12(5)-(7) of the amending Act) by virtue of Finance Act 2017 (c. 10), s. 12(4)(f)

Notes on Part 12

Modifications

C1: Pt. 12 applied by 2010 c. 8, s. 425(5) (as inserted (with effect in accordance with Sch. 5 para. 25(1)-(3) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 5 para. 1 (with Sch. 5 paras. 27, 32-34))