§ Sir William Clark
asked the Chancellor of the Exchequer whether he will make a statement, in relation to approved save-as-you-earn share option schemes, about the position of employees who work for a subsidiary company when it leaves the control of a company operating a scheme for the group as a whole.
§ Mr. Ridley
Yes. The Inland Revenue has until recently taken the view that an employee in this position, who continued to work for the former subsidiary company, could not exercise his option rights, even if he had held them for more than three years. As a result of legal advice, the Revenue has revised its view of the relevant legislation—paragraph 8 of schedule 10 to the Finance Act 1980—and is issuing a statement of practice. This explains how an employee in these circumstances may be considered to have "ceased employment" and therefore be able to exercise his option rights.