Section 536 — Income Tax (Earnings and Pensions) Act 2003: Other disqualifying events

Other disqualifying events 536 1 The following are also disqualifying events in relation to a qualifying option—

a any variation of the terms of the option whose effect is either—

i to increase the market value of the shares that are the subject of the option, or ii that the requirements of Schedule 5 would no longer be met in relation to the option;

b any alteration to the share capital of the relevant company—

i to which subsection (2) (share values affected by alteration of rights or restrictions) of section 537 applies, and ii whose effect is that the requirements of Schedule 5 would no longer be met in relation to the option;

c any alteration to the share capital of the relevant company to which—

i subsection (2) (share values affected by alteration of rights or restrictions),

and ii subsection (3) (alteration designed to increase share values), of section 537 apply;

d a conversion of any of the shares to which the option relates into shares of a different class, except in a case within section 538(2);

and e the grant to the employee of a relevant CSOP option, if immediately after it is granted the employee holds unexercised employee options in respect of shares with a total value of more than £250,000 .

2 In subsection (1)(e)— “relevant CSOP option”, and “employee option”, have the meaning given by section 539 (CSOP and other options relevant for purposes of this section); and sub-paragraphs (6) to (8) of paragraph 5 of Schedule 5 (determination of value of shares) apply for the purposes of subsection (1)(e) as they apply for the purposes of paragraph 5.