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Income Tax (Earnings and Pensions) Act 2003

Section 551: “Qualifying disposals” for purposes of section 550

2223.This section sets out that a “qualifying disposal” can be of any of the ordinary share capital of the company, or money paid outright, provided one of three conditions is met. This section derives from paragraph 7(6) and (7) of Schedule 8 to ICTA.

2224.The conditions mentioned are set out in subsections (2), (4) and (5).

2225.Subsection (3) is new. Although subsection (2) refers to “employees of the company”, it is Inland Revenue practice to extend the benefit of this provision to employees of a subsidiary company (a subsidiary company being taken to mean a company under another company’s control, with the word “control” taking the meaning in section 840 of ICTA). Subsection (3) reflects that Inland Revenue practice. See Change 133 in Annex 1.

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