(1)This section applies where—
(a)a company expends a sum in making a payment by way of contribution to the trustees of a trust which is a qualifying employee share ownership trust at the time the sum is expended,
(b)at that time, the company or a company which it then controls has employees who are eligible to benefit under the terms of the trust deed,
(c)at that time the company is resident in the United Kingdom,
(d)before the expiry of the expenditure period the sum is expended by the trustees for one or more of the qualifying purposes, and
(e)before the end of the claim period a claim for relief under this section is made.
(2)In such a case the sum—
(a)shall be deducted in computing for the purposes of Schedule D the [F1profits] of a trade carried on by the company, or
(b)if the company is an investment company or a company in the case of which section 75 of the Taxes Act 1988 applies by virtue of section 76 of that Act, shall be treated as expenses of management.
(3)For the purposes of subsection (1)(b) above, the question whether one company is controlled by another shall be construed in accordance with section840 of the Taxes Act 1988.
(4)For the purposes of subsection (1)(d) above each of the following is a qualifying purpose—
(a)the acquisition of shares in the company which established the trust;
(b)the repayment of sums borrowed;
(c)the payment of interest on sums borrowed;
(d)the payment of any sum to a person who is a beneficiary under the terms of the trust deed;
(e)the meeting of expenses.
(5)For the purposes of subsection (1)(d) above the expenditure period is the period of nine months beginning with the day following the end of the period of account in which the sum is charged as an expense of the company, or such longer period as the Board may allow by notice given to the company.
(6)For the purposes of subsection (1)(e) above the claim period is the period of two years beginning with the day following the end of the period of account in which the sum is charged as an expense of the company.
(7)For the purposes of this section the trustees of an employee share ownership trust shall be taken to expend sums paid to them in the order in which the sums are received by them (irrespective of the number of companies making payments).
Textual Amendments
F1Words in s. 67(2)(a) substituted (31.7.1998) by 1998 c. 36, s. 46(3), Sch. 7 para. 3
Modifications etc. (not altering text)
C1 See Finance Act 1990 (c. 29) ss.31–40—.roll-over relief for disposal of assets to employeeshare ownership trusts
C2S. 67 excluded (10.7.2003) by Finance Act 2003 (c. 14), s. 142(1)