Section DC 14 — Income Tax Act 2007: Criteria for approval of share purchase schemes: when period of restriction ends

DC 14 Criteria for approval of share purchase schemes: when period of restriction ends What this section does (1) This section sets out the criteria, relating to the provisions of a share purchase scheme on the period when the period of restriction ends, that the Commissioner applies in determining whether or not to approve the scheme. General rule (2) The scheme must provide for— (a) the trustee— (i) to transfer the shares to the employee if the employee is still employed by the company; or (ii) at the option of the employee, to buy the shares at their market value on the date of purchase; or (b) the trustee to apply subsection (3) or (4), if either applies, in priority to paragraph (a). Death, accident, sickness, redundancy, or retirement at normal retiring age (3) If the period of restriction ends because the employee ends their employment through death, accident, sickness, redundancy, or retirement at normal retiring age, the scheme must provide for— (a) the trustee to transfer the shares to the legal representative of the employee’s estate or to the former employee; or (b) at the option of the legal representative or former employee, the trustee to buy the shares at their market value on the date of purchase, subject to the repayment of any outstanding loan under the scheme for the shares. Employment ends for other reason (4) If the period of restriction ends because the employee ends their employment for any reason other than a reason described in subsection (3), the scheme must provide for the trustee to buy the shares at their market value on the date on which the employee ends their employment, subject to the repayment of any outstanding loan under the scheme for the shares. Purchase price when trustee buys shares (5) If the trustee buys the shares when the period of restriction ends, the scheme must provide for the purchase price to be no more than the price paid for the shares by the employee. Defined in this Act: Commissioner , company , employee , normal retiring age , pay , period of restriction , share , share purchase scheme , trustee , Compare: 2004 No 35 s DC 13 Section DC 14(4): amended (with effect on 1 April 2008), on 7 December 2009, by section 13 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).