Part 7

Employment income: income and exemptions relating to securities
Chapter 11

Supplementary provisions about employee benefit trusts

Employee benefit trusts

“Qualifying disposals” for purposes of section 550
551
1
For the purposes of section 550 (meaning of “employee benefit trust”) a “qualifying disposal” is a disposal of property consisting of—
a
any of the ordinary share capital of the company, or
b
money paid outright,
where any of conditions 1, 2 and 3 is met.
2
Condition 1 is that the property has been applied for the benefit of—
a
individual employees or former employees of the company,
b
spouses or civil partners , former spouses or civil partners , widows or widowers or surviving civil partners of employees or former employees of the company,
c
dependants of persons within paragraph (a), or
d
relatives, or spouses or civil partners of relatives, of persons within paragraph (a) or (b).
3
In subsection (2) each reference to the company includes a reference to a company controlled by the company.
4
Condition 2 is that the property has been applied for charitable purposes.
5
Condition 3 is that the property has been transferred to—
a
the trustees of another employee benefit trust,
b
the trustees of a qualifying employee share ownership trust (within the meaning of Schedule 5 to FA 1989), or
c
the trustees of a profit sharing scheme approved under Schedule 9 to ICTA (approved share option schemes and profit sharing schemes).
6
In this section “relative” means—
a
parent, child or remoter relation in the direct line, or
b
brother, sister, uncle, aunt, nephew or niece.
Pt. 7: power to modify conferred (7.4.2005) by Finance Act 2005 (c. 7), s. 21(8)-(10)
Words in s. 551(2)(d) inserted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 153(b)
Pt. 7 heading substituted (with effect in accordance with Sch. 22 para. 2(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 2(1)
Words in s. 551(2)(b) inserted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 153(a)(i)
Words in s. 551(2)(b) inserted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 153(a)(ii)