Income Tax (Earnings and Pensions) Act 2003

68Meaning of “material interest” in a companyU.K.
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(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 [F1other 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 [F2other 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 [F3section 448 of CTA 2010] except that, for this purpose, “relative” in [F4section 448(1)] has the meaning given by subsection (5) below, and

  • “participator” has the meaning given by [F5section 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 [F6or civil partner],

(b)a parent, child or remoter relation in the direct line either of B or of B’s spouse [F6or civil partner],

(c)a brother or sister of B or of B’s spouse [F6or civil partner], or

(d)the spouse [F6or civil partner] of a person falling within paragraph (b) or (c).

Textual Amendments

F1Words 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)

F2Words 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)

F3Words 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)

F4Words 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)

F5Words 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)