SCHEDULE 5 Employee Share Ownership Trusts
Securities
9
(1)
The trust deed must provide that—
(a)
where the trustees transfer securities to a beneficiary, they must do soon qualifying terms;
(b)
the trustees must transfer securities before the expiry of the F1qualifying period beginning with the date on which they acquired them.
(2)
For the purposes of sub-paragraph (1) above a transfer of securities ismade on qualifying terms if—
(a)
all the securities transferred at the same time F2other than those transferred on a transfer such as is mentioned in sub-paragraph (2ZA) below are transferred on similarterms,
(b)
securities have been offered to all the persons who are beneficiariesunder the terms of the trust deed F3by virtue of a rule which conforms with paragraph 4(2), (3) or (4) above when the transfer is made, and
(c)
securities are transferred to all such F4persons who have accepted.
F5(2ZA)
For the purposes of sub-paragraph (1) above a transfer of securities is also made on qualifying terms if—
(a)
it is made to a person exercising a right to acquire shares, and
(b)
that right was obtained in accordance with the provisions of F6an SAYE option scheme—
(i)
which was established by, or by a company controlled by, the founding company, and
(ii)
which is approved under F7Schedule 3 to the Income Tax (Earnings and Pensions) Act 2003, and
(c)
that right is being exercised in accordance with the provisions of that scheme, and
(d)
the consideration for the transfer is payable to the trustees.
F8(2A)
For the purposes of sub-paragraph (1) above the qualifying period is—
(a)
seven years, in the case of trusts established on or before the day on which the Finance Act 1994 was passed;
(b)
twenty years, in the case of other trusts.
(3)
For the purposes of sub-paragraph (2) above, the fact that terms varyaccording to the levels of remuneration of beneficiaries, the length of theirservice, or similar factors, shall not be regarded as meaning that the termsare not similar.
(4)
The trust deed must provide that, in ascertaining for the purposes of arelevant rule whether particular securities are transferred, securitiesacquired earlier by the trustees shall be treated as transferred by thembefore securities acquired by them later; and a relevant rule is one which isincluded in the trust deed and conforms with sub-paragraph (1) above.