PART IV

Capital Transfer Tax
CHAPTER II

Settlements Without Interests in Possession

Special cases

Property becoming subject to employee trusts
115
1
Tax shall not be charged under section 108 above in respect of shares in or securities of a company which cease to be relevant property on becoming held on trusts of the description specified in paragraph 17(1) of Schedule 5 to the Finance Act 1975 if the conditions in subsection (2) below are satisfied.
2
The conditions referred to in subsection (1) above are—
a
that the persons for whose benefit the trusts permit the settled property to be applied include all or most of the persons employed by or holding office with the company;
b
that, at the date when the shares or securities cease to be relevant property or at a subsequent date not more than one year thereafter, both the conditions mentioned in subsection (2) of section 67 of the Finance Act 1978 (read with subsections (3) and (6)) are satisfied, without taking account of shares or securities held on other trusts; and
c
that the trusts do not permit any of the settled property to be applied at any time (whether during any such period as is referred to in the said paragraph 17(1) or later) for the benefit of any of the persons mentioned in subsection (4) of the said section 67 (read with subsections (5) and (6)) or for the benefit of the settlor or of any person connected with him.
3
In its application for the purposes of subsection (2)(c) above, section 67(4) of the Finance Act 1978 shall be construed as if—
a
references to section 67(1) were references to subsection (2) above; and
b
references to the time of the transfer of value were references to the time when the property ceases to be relevant property.
1975 c. 7.
1978 c. 42.