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Companies Act 1985

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F1F1SCHEDULE 2E+W+S Interpretation of References to “Beneficial Interest”

Textual Amendments

[F2Part IE+W+S References in Sections 23, 145, 146 and 148]

Residual interests under pension and employees’ share schemesE+W+S

1(1)Where shares in a company are held on trust for the purposes of a pension scheme or an employees’ share scheme, there is to be disregarded any residual interest which has not vested in possession, being an interest of the company or, [F3as this paragraph applies for the purposes of section 23(2)],

  • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F4

  • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F4

of any subsidiary of the company.

(2)In this paragraph, “a residual interest” means a right of the company or subsidiary in question (“the residual beneficiary”) to receive any of the trust property in the event of—

(a)all the liabilities arising under the scheme having been satisfied or provided for, or

(b)the residual beneficiary ceasing to participate in the scheme, or

(c)the trust property at any time exceeding what is necessary for satisfying the liabilities arising or expected to arise under the scheme.

(3)In sub-paragraph (2), references to a right include a right dependent on the exercise of a discretion vested by the scheme in the trustee or any other person; and references to liabilities arising under a scheme include liabilities that have resulted or may result from the exercise of any such discretion.

(4)For purposes of this paragraph, a residual interest vests in possession—

(a)in a case within (a) or sub-paragraph (2), on the occurrence of the event there mentioned, whether or not the amount of the property receivable pursuant to the right mentioned in that sub-paragraph is then ascertained, and

(b)in a case within (b) or (c) of that sub-paragraph, when the residual beneficiary becomes entitled to require the trustee to transfer to that beneficiary any of the property receivable pursuant to that right.

(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F5

2(1)The following has effect as regards the operation of sections . . . F6 144, 145 and 146 to 149 in cases where a residual interest vests in possession.

(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F7

(3)Where by virtue of paragraph 1 of this Schedule any shares are exempt from section 144 or 145 at the time when they are issued or acquired but the residual interest in question vests in possession before they are disposed of or fully paid up, those sections apply to the shares as if they had been issued or acquired on the date on which that interest vests in possession.

(4)Where by virtue of paragraph 1 any shares are exempt from sections 146 to 149 at the time when they are acquired but the residual interest in question vests in possession before they are disposed of, those sections apply to the shares as if they had been acquired on the date on which that interest vests in possession.

(5)The above sub-paragraphs apply irrespective of the date on which the residual interest vests or vested in possession; but where the M1date on which it vested was before 26th July 1983 (the passing of the Companies (Beneficial Interests) Act 1983), they have effect as if the vesting had occurred on that date.

Employer’s charges and other rights of recoveryE+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Trustee’s right to expenses, remuneration, indemnity, etc.E+W+S

4(1)Where a company is a trustee . . . F13, there are to be disregarded any rights which the company has in its capacity as trustee including, in particular, any right to recover its expenses or be remunerated out of the trust property and any right to be indemnified out of that property for any liability incurred by reason of any act or omission of the company in the performance of its duties as trustee.

(2)[F14As this paragraph applies for the purposes of section 23(2)] . . . F15, sub-paragraph (1) has effect as if references to a company included any body corporate which is a subsidiary of a company.

[F16(3)As respects sections 145, 146 and 148, sub-paragraph (1) above applies where a company is a personal representative as it applies where a company is a trustee.]

SupplementaryE+W+S

5(1)The following applies for the interpretation of [F17this Part of this Schedule].

(2)Pension scheme” means any scheme for the provision of benefits consisting of or including relevant benefits for or in respect of employees or former employees; and “relevant benefits” means any pension, lump sum, gratuity or other like benefit given or to be given on retirement or on death or in anticipation of retirement or, in connection with past service, after retirement or death.

(3)In sub-paragraph (2) of this paragraph, and in paragraph 3(2)(a), “employer” and “employee” are to be read as if a director of a company were employed by it.

F18F18[F19Part IIE+W+S References in Schedule 5]

Resididual interests under pension and employees’ share schemesE+W+S

[F20 Employer’s charges and other rights of recovery]E+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F23 Trustee’s right to expenses, remuneration, indemnity, &c.]E+W+S

[F24 Supplementary]E+W+S

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