SCHEDULE 5 Employee Share Ownership Trusts
Interpretation
16
(1)
For the purposes of this Schedule a person shall be treated as having amaterial interest in a company if he, either on his own or with one or moreof his associates, or if any associate of his with or without other suchassociates,—
(a)
is the beneficial owner of, or able (directly or through the medium ofother 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 eventof the winding-up of the company or in any other circumstances, give anentitlement to receive more than 5 per cent. of the assets which would thenbe available for distribution among the participators.
(2)
In this paragraph—
(a)
“associate” has the same meaning as in section 417(3) and (4)of the Taxes Act 1988, but subject to sub-paragraph (3) below,
(b)
“control” has the meaning given by section 840 of that Act,and
(c)
“participator” has the same meaning as in Part XI of thatAct.
(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 regardedas 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” hasthe same meaning as in paragraph 7 of Schedule 8 to the Taxes Act 1988, exceptthat in its application for this purpose paragraph 7(5)(b) of that Scheduleshall have effect as if it referred to the day on which this Act was passedinstead of to 14th March 1989.
(5)
This sub-paragraph applies in relation to a person if at any time on orafter 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 mediumof 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 forthe purposes of that paragraph.