Pensions analysis: Options UK Personal Pensions LLP (‘Options’) sought judicial review of a decision by the Financial Ombudsman Service (‘the Ombudsman’ or ‘FOS’) that it was required to compensate a complainant for losses to his self-invested personal pension (SIPP). Options contended that the decision should be quashed on the grounds that the Ombudsman had (i) found Options liable where it would not have been liable at law but had failed to give reasons for doing so, (ii) erroneously imposed on Options duties of due diligence which it did not owe, and (iii) reached conclusions on alleged breaches of duty that were unreasonable. The Court of Appeal unanimously dismissed the claim. The decision offers useful guidance on the scope of the Ombudsman’s jurisdiction and the extent to which non-actionable provisions in the Financial Conduct Authority (FCA) Handbook, in particular the Principles for Businesses, may allow complainants to obtain redress from the Ombudsman where they might struggle to do so in court. Written by Henry Day, barrister at Radcliffe Chambers.

Pensions analysis: The Pensions Ombudsman has upheld a complaint about a delay in selling investments. Martin Scott of gunnercooke LLP looks at the decision.

Pensions analysis: The Pensions Ombudsman has rejected a complaint about investing in a loan note. Martin Scott of gunnercooke LLP looks at the decision.

The SIP is the only tax advantaged share plan under which participants can potentially enjoy unlimited gains in the value of their shares free of income tax, National Insurance contributions (NICs) and capital gains tax (CGT). Under all of the other tax advantaged plans (enterprise management incentives (EMI) schemes, save as you earn (SAYE) schemes and company share option plans (CSOPs)), CGT is potentially due on the increase in the value of shares since the options were granted. However, if a participant in a SIP retains their shares in the SIP until they are disposed of, they will not pay any CGT on such disposal. It should be noted that if a disqualifying event occurs in relation to a SIP, the beneficial tax treatment associated with SIPs will not be available in relation to any awards made after that event. For further details, see Practice Note: SIPs—qualifying companies and type of shares—Restrictions on shares and disqualifying events for SIPs. The tax consequences explained in this Practice Note apply to individuals

The impact of capital reorganisations, takeovers and demergers on awards made under a share incentive plan (SIP) is more complex than other tax-advantaged plans as participants hold shares (through the SIP trustees) rather than options over shares. In the case of option plans, a share capital reorganisation (not involving a takeover) either has no material effect on outstanding options (as the impact of the reorganisation on the company’s share price is minimal) or the value of participants’ rights can be preserved through an adjustment to the number of shares subject to the option and the exercise price. However, in the case of SIP awards, the SIP trustees will usually need to take some action and that may require instructions from the participants. In addition, there are specific rules regarding the assets that can be held in the SIP following a reorganisation and therefore the decisions taken can affect a participant’s tax treatment. How takeovers affect SIP awards will depend how on the transaction is structured and the terms of the awards. As a result of recommendations

The company establishing a SIP The company establishing the share incentive plan (SIP) does not have to be the company whose shares are awarded. However: • the shares to be awarded, and • the relationship between the company establishing the SIP and the company whose shares are to be awarded must satisfy the relevant legislative requirements. A SIP can be established either: • solely for the benefit of employees of the company that established the SIP, or • for employees of the establishing company and for employees of other companies which it controls (referred to as a group plan)—see: Constituent companies below In the situation of a group of companies where the parent company's shares are to be awarded, either: • the parent company could establish the SIP and extend it to the relevant subsidiaries, or • each subsidiary could establish its own SIP as long as the other statutory requirements are met regarding the shares under awards—see: Requirements for the shares The advantage of each subsidiary establishing

The share incentive plan (SIP) legislation is very prescriptive in relation to the nature of the trust that is required to operate in conjunction with a SIP, and the permitted rights and obligations of the trustees. Therefore, it is likely that the introduction of any new SIP will also necessitate the establishment of a new trust at the same time. This Practice Note looks at what requirements apply to SIP trusts as well as the trustees of such trusts. Requirement for trustees The trust is a key element of the SIP. In order to operate a SIP, it must provide for the establishment of a body of trustees consisting of persons resident in the UK. Therefore, each and every person acting as trustee, whether an individual or a corporation, must be resident in the UK. Most publicly listed companies operating SIPs have a single professional corporate trustee but the trustees can also be a collection of at least two individuals or a subsidiary of the company. Requirement

For a flowchart focusing on the conditions that must be met in relation to individuals to whom SIP awards are to be made, to be read in conjunction with this Practice Note, see: Share incentive plan (SIP)—flowchart to determine individual's eligibility. Terminology The SIP code (the legislation governing the terms and requirements of Share Incentive Plans (SIPs) and setting out the available tax reliefs) uses the phrase an ‘award of shares’ to indicate shares that are either appropriated to employees or acquired on behalf of employees on a particular occasion. Therefore, where numerous employees are awarded shares at the same time pursuant to the same invitation, each employee is considered to have participated in the same award of shares. As dividend shares are not ‘awarded’ as such, they are not included within the meaning of an ‘award of shares’ in paragraph 5, Part 1 of Schedule 2 to the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003) and so the requirements relating to eligibility do not apply to dividend shares. All-employee

A share incentive plan (SIP) gives employees the opportunity to acquire shares in their employer or a parent company of the employer in a tax efficient manner. The legislative framework governing SIPs is mostly contained in: • Schedule 2 to the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003), which sets out how the SIP can be operated and the main conditions that have to be satisfied for the SIP to be a ‘Schedule 2 SIP’, and • ITEPA 2003, Pt 6 Ch 7 (ITEPA 2003, ss 488–515), which sets out how shares acquired under a SIP are treated for income tax purposes For further more general information on SIPs, see Practice Note: What is a SIP? Below is a checklist of the main issues to be considered before implementing or operating a SIP. It assumes that the SIP Trust Deed and Rules are compliant with ITEPA 2003, Sch 2. See Precedents: SIP rules and SIP trust deed. • Preliminary considerations ◦ is the SIP the most appropriate plan? See Practice Note: When is a

Substantial lessening of competition.

Sight Loss Councils (SLC) has published guidance for taxi, private-hire vehicle (PHV) and mini cab staff on guide dogs, to help drivers and other staff supporting taxi and minicab travel support the blind and partially sighted people and their guide dogs. The guidance is available in audio, written form and in both English and Urdu.

The Scottish Land Commission (SLC) has published guidance on the diversification of land ownership and tenure. The SLC asserts that more inclusive and diverse ownership and management of land and buildings may foster a range of benefits to landowners and communities, strengthening local economies and supporting sustainability. The guidance is intended to provide practical advice for landowners and land managers, helping them to establish or record a transparent process for responding to proposals for diversification of ownership and tenure of assets.