Part 3

Employment income: earnings and benefits etc. treated as earnings
Chapter 2

Taxable benefits: the benefits code

General definitions for benefits code

Meaning of “material interest” in a company
68
1
For the purposes of the benefits code a person has a material interest in a company if condition A or B is met.
2
Condition A is that the person (with or without one or more associates) or any associate of that person (with or without one or more other such associates) is—
a
the beneficial owner of, or
b
able to control, directly or through the medium of other companies or by any other indirect means,
more than 5% of the ordinary share capital of the company.
3
Condition B is that, in the case of a close company, the person (with or without one or more associates) or any associate of that person (with or without one or more other such associates), possesses or is entitled to acquire, such rights as would—
a
in the event of the winding-up of the company, or
b
in any other circumstances,
give an entitlement to receive more than 5% of the assets which would then be available for distribution among the participators.
4
In this section—
- “associate” has the meaning given by section 448 of CTA 2010 except that, for this purpose, “relative” in section 448(1) has the meaning given by subsection (5) below, and
- “participator” has the meaning given by section 454 of CTA 2010.
5
For the purposes of this section a person (“A”) is a relative of another (“B”) if A is—
a
B’s spouse or civil partner,
b
a parent, child or remoter relation in the direct line either of B or of B’s spouse or civil partner,
c
a brother or sister of B or of B’s spouse or civil partner, or
d
the spouse or civil partner of a person falling within paragraph (b) or (c).
Words in s. 68(4) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 383(4)(a)(ii) (with Sch. 2)
Words in s. 68(3) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 383(3) (with Sch. 2)
Words in s. 68(5) inserted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 140
Words in s. 68(2) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 383(2) (with Sch. 2)
Words in s. 68(4) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 383(4)(b) (with Sch. 2)
Words in s. 68(4) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 383(4)(a)(i) (with Sch. 2)