Finance Act 1989

9 (1) The trust deed must provide that—

(a) where the trustees transfer securities to a beneficiary, they must do so on qualifying terms;

(b) the trustees must transfer securities before the expiry of the period of seven years beginning with the date on which they acquired them.

(2) For the purposes of sub-paragraph (1) above a transfer of securities is made on qualifying terms if—

(a) all the securities transferred at the same time are transferred on similar terms,

(b) securities have been offered to all the persons who are beneficiaries under the terms of the trust deed when the transfer is made, and

(c) securities are transferred to all such beneficiaries who have accepted.

(3) For the purposes of sub-paragraph (2) above, the fact that terms vary according to the levels of remuneration of beneficiaries, the length of their service, or similar factors, shall not be regarded as meaning that the terms are not similar.

(4) The trust deed must provide that, in ascertaining for the purposes of a relevant rule whether particular securities are transferred, securities acquired earlier by the trustees shall be treated as transferred by them before securities acquired by them later; and a relevant rule is one which is included in the trust deed and conforms with sub-paragraph (1) above.