Clause 3 - Special provision for roll-overs
Social Security Contributions
12:00 pm
Mr Stephen Timms (Financial Secretary, HM Treasury; East Ham, Labour)
The clause is inevitably somewhat complex, because we must ensure that there is a level playing field for all kinds of options. To exchange one option for another at parity will create no problems, but we must ensure that the favourable new rules are not misused to escape liability where the exchange is not at parity. Otherwise, there would be nothing to prevent a settled option on one share from being extended for an option on 10,000 shares, with no further national insurance liability. The rules also need to be able to deal with a situation where one option is exchanged for another in the same or a different company, where other assets and cash may form part of the deal and the option is rolled over more than once.
The Bill must address those complex situations to ensure that, where the exchange is at parity, the settlement is still valid.
The amendments reveal what may be technical defects in the wording of the clause, so I give the Committee an undertaking that we will reconsider the clause to ensure that it achieves the necessary result and will make any necessary changes on Report. I hope that, on that basis, the hon. Gentleman will withdraw the amendment.