Finance Act 1989 (c. 26)

SCHEDULES

SCHEDULE 5 U.K. Employee Share Ownership Trusts

Modifications etc. (not altering text)

C1 Sch. 5 applied (6.3.1992 with effect as mentioned in s. 289(1)(2) of the applying Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 228(7), 235(8), 289 (with ss. 60, 101(1), 171, 201(3))

Interpretation U.K.

14 U.K. For the purposes of this Schedule the following are securities—

(a) shares;

(b) debentures.

Modifications etc. (not altering text)

C2 See Finance Act 1990 (c. 29) ss.31–40—roll-over relief for disposal of shares to employeeshare ownership trusts

15 U.K. For the purposes of this Schedule, the question whether one company is controlled by another shall be construed in accordance with [F1 section 995 of the Income Tax Act 2007].

Textual Amendments

F1 Words in Sch. 5 para. 15 substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 283(2) (with Sch. 2)

Modifications etc. (not altering text)

C3 See Finance Act 1990 (c. 29) ss.31–40—roll-over relief for disposal of shares to employeeshare ownership trusts

16 (1) For the purposes of this Schedule a person shall be treated as having a material interest in a company if he, either on his own or with one or more of his associates, or if any associate of his with or without other such associates,— U.K.

(a) is the beneficial owner of, or able (directly or through the medium of other companies or by any other indirect means) to control, more than 5 percent. of the ordinary share capital of the company, or

(b) possesses, or is entitled to acquire, such rights as would, in the event of the winding-up of the company or in any other circumstances, give an entitlement to receive more than 5 per cent. of the assets which would then be available for distribution among the participators.

(2) In this paragraph—

(a) “associate” has the [F2 meaning given by section 448 of the Corporation Tax Act 2010], but subject to sub-paragraph (3) below,

(b) “control” has the meaning given by [F3 section 995 of the Income Tax Act 2007], and

(c) “participator” has the [F4 meaning given by section 454 of the Corporation Tax Act 2010].

(3) Where a person has an interest in shares or obligations of the company asa beneficiary of an employee benefit trust, the trustees shall not be regarded as associates of his by reason only of that interest unless sub-paragraph (5)below applies in relation to him.

(4) In sub-paragraph (3) above “employee benefit trust” has the same meaning as in paragraph 7 of Schedule 8 to the Taxes Act 1988, except that in its application for this purpose paragraph 7(5)(b) of that Schedule shall have effect as if it referred to the day on which this Act was passed instead of to 14th March 1989.

(5) This sub-paragraph applies in relation to a person if at any time on or after the day on which this Act was passed—

(a) he, either on his own or with any one or more of his associates, or

(b) any associate of his, with or without other such associates,

has been the beneficial owner of, or able (directly or through the medium of other companies or by any other indirect means) to control, more than 5 percent. of the ordinary share capital of the company.

(6) Sub-paragraphs (9) to (12) of paragraph 7 of Schedule 8 to the Taxes Act1988 shall apply for the purposes of sub-paragraph (5) above as they apply for the purposes of that paragraph.

Textual Amendments

F2 Words in Sch. 5 para. 16(2)(a) 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. 216(a) (with Sch. 2)

F3 Words in Sch. 5 para. 16(2)(b) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 283(3)(a) (with Sch. 2)

F4 Words in Sch. 5 para. 16(2)(c) 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. 216(b) (with Sch. 2)

Modifications etc. (not altering text)

C4 See Finance Act 1990 (c. 29) ss.31–40—roll-over relief for disposal of shares to employee share ownership trusts

[F5 17 U.K. For the purposes of this Schedule a trust is established when the deed under which it is established is executed.]

Textual Amendments

F5 Sch. 5 para. 17 inserted (3.5.1994) by 1994 c. 9, s. 102, Sch. 13 para. 8

[F6 18 U.K. For the purposes of this Schedule “SAYE option scheme” has the same meaning as in the SAYE code (see section 516 of the Income Tax (Earnings and Pensions) Act 2003 (approved SAYE option schemes)).]

Textual Amendments

F6 Sch. 5 para. 18 inserted (with effect in accordance with s. 723(1)(a)(b) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 723, Sch. 6 para. 163(5) (with Sch. 7)