Search Legislation

Income and Corporation Taxes Act 1988

 Help about what version

What Version

 Help about advanced features

Advanced Features

Changes to legislation:

Income and Corporation Taxes Act 1988, Section 187 is up to date with all changes known to be in force on or before 19 March 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations. Help about Changes to Legislation

Close

Changes to Legislation

Revised legislation carried on this site may not be fully up to date. Changes and effects are recorded by our editorial team in lists which can be found in the ‘Changes to Legislation’ area. Where those effects have yet to be applied to the text of the legislation by the editorial team they are also listed alongside the legislation in the affected provisions. Use the ‘more’ link to open the changes and effects relevant to the provision you are viewing.

View outstanding changes

Changes and effects yet to be applied to the whole Act associated Parts and Chapters:

Whole provisions yet to be inserted into this Act (including any effects on those provisions):

  • s. 109A(4B) inserted by 2005 c. 7 Sch. 4 para. 6(3) (This amendment not applied to legislation.gov.uk. The amending provision (2005 c. 7, Sch. 4 para. 6) repealed retrospectively by 2005 c. 22, Sch. 6 para. 4(1)(6))
  • Sch. 19AB para. 5(5)(a)(b) words substituted by S.I. 2001/3629 art. 52(2)(n) (This amendment not applied to legislation.gov.uk. The words to be substituted do not occur in Sch. 19AB para. 5)
187 Interpretation of sections 185 and 186 and Schedules 9 and 10.U.K.

(1)[F1M1In sections 185 and 186, this section and Schedules 9 and 10 “the relevant provisions” means those sections (including this section) and Schedules.]

(2)[F1For the purposes of the relevant provisions, except where the context otherwise requires—

  • appropriate percentage” shall be construed in accordance with paragraph 3 of Schedule 10;

  • approved”, in relation to a scheme, means approved under Schedule 9;

  • associated company” has the same meaning as in section 416, except that, for the purposes of paragraph 23 of Schedule 9, subsection (1) of that section shall have effect with the omission of the words “ or at any time within one year previously ”;

  • bonus date” has the meaning given by paragraph 17 of Schedule 9;

  • capital receipt” means money or money’s worth to which the trustees of or a participant in a profit sharing scheme become or becomes entitled as mentioned in section 186(3), but subject to paragraph 4 of Schedule 10;

  • certified contractual savings scheme” has the meaning given by section 326;

  • control” has the same meaning as in section 840;

  • grantor”, in relation to any scheme, means the company which has established the scheme;

  • group scheme” and, in relation to such a scheme, “participating company” have the meanings given by paragraph 1(3) and (4) of Schedule 9;

  • initial market value”, in relation to shares in a profit sharing scheme, has the meaning given by paragraph 30(4) of Schedule 9;

  • locked-in value”, in relation to any shares, shall be construed in accordance with section 186(5);

  • market value” has the same meaning as in Part VIII of the [F21992 Act];

  • new holding” has the meaning given by section [F2126(1)(b) of the 1992 Act];

  • participant”, in relation to a profit sharing scheme, means an individual to whom the trustees of the scheme have appropriated shares;

  • participant’s shares”, in relation to a participant in a profit sharing scheme, means, subject to paragraph 5(4) of Schedule 10, shares which have been appropriated to the participant by the trustees;

  • F3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

  • period of retention” has the meaning given by paragraph 2 of Schedule 10;

  • release date”, in relation to any of the shares of a participant in a profit sharing scheme, means the [F4third] anniversary of the date on which they were appropriated to him;

  • relevant amount”, in relation to a participant in a profit sharing scheme, means an amount which is [F5not less than £3,000 and not more than £8,000] but which, subject to that, is 10 per cent. of his salary (determined under subsection (5) below) for the year of assessment in question or the preceding year of assessment, whichever is the greater;

  • relevant requirements” has the meaning given by paragraph 1 of Schedule 9;

  • savings-related share option scheme” has the meaning given by paragraph 1 of Schedule 9;

  • scheme” means a savings-related share option scheme, a share option scheme which is not a savings-related share option scheme or a profit sharing scheme, as the context may require;

  • shares” includes stock;

  • [F6specified age”, in relation to a scheme, means the age specified in pursuance of paragraph 8A of Schedule 9 as the specified age for the purposes of the scheme;]

  • the trustees”, in relation to an approved profit sharing scheme or the shares of a participant in such a scheme, means the body of persons for the establishment of which the scheme must provide as mentioned in paragraph 30 of Schedule 9; and

  • just instrument”, in relation to an approved profit sharing scheme, means the instrument referred to in paragraph 30(1)(c) of Schedule 9.]

(3)[F1M2For the purposes of the application of the relevant provisions in relation to any share option scheme or profit sharing scheme, a person has a material interest [F7in a company if he, either on his own or with one or more associates, or if any associate of his with or without such other associates,—

(a)is the beneficial owner of, or able, directly or through the medium of other companies, or by any other indirect means to control, more than 25 per cent., or in the case of a share option scheme which is not a savings-related share option scheme more than 10 per cent., of the ordinary share capital of the company, or

(b)where the company is a close company, possesses, or is entitled to acquire, such rights as would, in the event of the winding-up of the company or in any other circumstances, give an entitlement to receive more than 25 per cent., or in the case of a share option scheme which is not a savings-related share option scheme more than 10 per cent., of the assets which would then be available for distribution among the participators.]

  • In this subsection “associate” has the meaning given by section 417(3) and (4) [F7and “participator” has the meaning given by section 417(1)].]

(4)[F1M3Subsection (3) above shall have effect subject to the provisions of Part VI of Schedule 9.]

(5)M4For the purposes of subsection (2) above, a participant’s salary for a year of assessment means such of the emoluments of the office or employment by virtue of which he is entitled to participate in a profit sharing scheme as are liable to be paid in that year under deduction of tax pursuant to section 203 after deducting therefrom amounts included by virtue of Chapter II of this Part.

(6)[F1M5Section 839 shall apply for the purposes of the relevant provisions.]

(7)[F1M6For the purposes of the relevant provisions a company is a member of a consortium owning another company if it is one of a number of companies which between them beneficially own not less than three-quarters of the other company’s ordinary share capital and each of which beneficially owns not less than one-twentieth of that capital.]

(8)M7Where the disposal referred to in section 186(4) is made from a holding of shares which were appropriated to the participant at different times, then, in determining for the purposes of the relevant provisions—

(a)the initial market value and the locked-in value of each of those shares, F8. . .

(b)F8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9)M8Any of the relevant provisions with respect to—

(a)the order in which any of a participant’s shares are to be treated as disposed of for the purposes of those provisions, or

(b)the shares in relation to which an event is to be treated as occurring for any such purpose,

shall have effect in relation to a profit sharing scheme notwithstanding any direction given to the trustees with respect to shares of a particular description or to shares appropriated to the participant at a particular time.

(10)M9In the relevant provisions “workers’ cooperative” means a [F9registered society][F10, as defined in [F11section 1119 of CTA 2010]], which is a cooperative society and the rules of which include provisions which secure—

(a)that the only persons who may be members of it are those who are employed by, or by a subsidiary of, the society and those who are the trustees of its profit sharing scheme; and

(b)that, subject to any provision about qualifications for membership which is from time to time made by the members of the society by reference to age, length of service or other factors of any description, all such persons may be members of the society;

and in this subsection “cooperative society” has the same meaning as in [F12section 2 of the Co-operative and Community Benefit Societies Act 2014] or, as the case may be, [F13section 1 of] the M10Industrial and Provident Societies Act (Northern Ireland) 1969.

Textual Amendments

F1S. 187(1)-(4)(6)(7) repealed (except so far as relating to profit sharing schemes) (6.4.2003 with effect in accordance with s. 723(1) of the repealing Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 27, Sch. 8 Pt. 1 (with Sch. 7)

F2Words in s. 187(2) substituted (6.3.1992 with effect as mentioned in s. 289(1)(2) of the amending Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 289, 290, Sch. 10 para. 14(13) (with ss. 60, 101(1), 171, 201(3)).

F3S. 187(2): definition of "pensionable age" repealed (19.7.1995) by Pensions Act 1995 (c. 26), ss. 126, 177, 180(2)(a), Sch. 4 para. 12(a), Sch. 7 Pt. 2

F4Word in s. 187(2) substituted (with effect in accordance with s. 116(2)(3) of the amending Act) by Finance Act 1996 (c. 8), s. 116(1)

F5Words in s. 187(2) substituted (for the year 1991-92 and subsequent years of assessment) by virtue of Finance Act 1991 (c. 31), s. 41(1)(2)

F6S. 187(2): definition of "specified age" inserted by Finance Act 1991 (c. 31), s. 38(4)

F7Words in s. 187(3) substituted (in relation to accounting periods beginning after 31.3.1989) by Finance Act 1989 (c. 26), Sch. 12 para. 9

F8S. 187(8)(b) and preceding word repealed (with effect in accordance with s. 117(3) of the repealing Act) by Finance Act 1996 (c. 8), ss. 117(2), 205, Sch. 41 Pt. 5(5), Note 1

F9Words in s. 187(10) substituted (1.8.2014 in accordance with s. 154 of the amending Act) by Co-operative and Community Benefit Societies Act 2014 (c. 14), Sch. 4 para. 40(a) (with Sch. 5)

F10Words in s. 187(10) substituted (1.4.2009 with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 95 (with Sch. 2 Pts. 1, 2)

F11Words in s. 187(10) substituted (1.4.2010 with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), Sch. 1 para. 13 (with Sch. 2)

F12Words in s. 187(10) substituted (1.8.2014 in accordance with s. 154 of the amending Act) by Co-operative and Community Benefit Societies Act 2014 (c. 14), Sch. 4 para. 40(b) (with Sch. 5)

F13Words in s. 187(10) inserted (1.8.2014 in accordance with s. 154 of the amending Act) by Co-operative and Community Benefit Societies Act 2014 (c. 14), Sch. 4 para. 40(c) (with Sch. 5)

Modifications etc. (not altering text)

C1S. 187 modified (29.4.1996) by Finance Act 1996 (c. 8), ss. 115(1), 116(3)

C3S. 187 continued so far as relating to APS schemes (6.4.2003 with effect in accordance with s. 723(1) of the affecting Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 418(3) (with Sch. 7)

Marginal Citations

M1Source—1978 ss.53(2), 54(2), (4)(b), 6, 56(1), 57(1), (4), 61(1), Sch.9 1, 16; 1980 s.46(4), Sch.10 5(b), 8, 26(1); 1982 s.40(8); 1983 s.25(1); 1984 Sch.10 15(1), (2); 1985 s.45(2)

M2Source—1970 s.285(6); 1978 Sch.9 11(3)(b); 1980 Sch.10 26(2); 1984 Sch.10 4(4)

M3Source—1987 s.33(2)

M4Source—1978 s.61(4); 1983 s.25(2)

M5Source—1978 Sch.9 16; 1980 Sch.10 26(4); 1984 Sch.10 15(3)

M6Source—1978 Sch.9 17; 1980 Sch.10 26(5); 1984 Sch.10 15(4); 1986 s.23(5)

M7Source—1978 s.55(6)

M8Source—1978 s.61(2)

M9Source—1978 Sch.9 18; 1986 s.24(1)

M101969 c. 24. (N.I.).

Back to top

Options/Help

Print Options

You have chosen to open The Whole Act

The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open The Whole Act as a PDF

The Whole Act you have selected contains over 200 provisions and might take some time to download.

Would you like to continue?

You have chosen to open The Whole Act without Schedules

The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open The Whole Act without Schedules as a PDF

The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download.

Would you like to continue?

You have chosen to open the Whole Act

The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open the Whole Act without Schedules

The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open Schedules only

The Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

Close

Legislation is available in different versions:

Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.

Original (As Enacted or Made): The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text.

Close

See additional information alongside the content

Geographical Extent: Indicates the geographical area that this provision applies to. For further information see ‘Frequently Asked Questions’.

Show Timeline of Changes: See how this legislation has or could change over time. Turning this feature on will show extra navigation options to go to these specific points in time. Return to the latest available version by using the controls above in the What Version box.

Close

Opening Options

Different options to open legislation in order to view more content on screen at once

Close

More Resources

Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • correction slips
  • links to related legislation and further information resources
Close

Timeline of Changes

This timeline shows the different points in time where a change occurred. The dates will coincide with the earliest date on which the change (e.g an insertion, a repeal or a substitution) that was applied came into force. The first date in the timeline will usually be the earliest date when the provision came into force. In some cases the first date is 01/02/1991 (or for Northern Ireland legislation 01/01/2006). This date is our basedate. No versions before this date are available. For further information see the Editorial Practice Guide and Glossary under Help.

Close

More Resources

Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • correction slips

Click 'View More' or select 'More Resources' tab for additional information including:

  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • links to related legislation and further information resources