Part VII Other property, businesses, investments etc.
F1Employee-ownership trusts
236HDisposals to employee-ownership trusts
1
This section applies where—
a
a person other than a company (“P”) disposes of any ordinary share capital of a company (“C”) to the trustees of a settlement,
b
the relief requirements are met, and
c
P makes a claim under this section.
2
Section 17(1) (disposals and acquisitions treated as made at market value) does not apply to the disposal.
3
The disposal, and the acquisition by the trustees, are to be treated for the purposes of this Act as being made for such consideration as to secure that neither a gain nor a loss accrues on the disposal.
4
“The relief requirements” are—
a
that C meets the trading requirement (see section 236I) at the time of the disposal and continues to meet that requirement for the remainder of the tax year in which that time falls,
b
that the settlement meets the all-employee benefit requirement at the time of the disposal and continues to meet that requirement for the remainder of the tax year in which that time falls (see sections 236J to 236L and subsection (5) of this section),
c
that the settlement does not meet the controlling interest requirement (see section 236M) immediately before the beginning of the tax year in which the disposal occurs, but—
i
it meets that requirement at the end of that tax year, and
ii
if it met the requirement at an earlier time in that tax year (whether before or after the time of the disposal) it continued to meet it throughout the remainder of that tax year,
d
that the limited participation requirement is met (see section 236N), and
e
that this section does not apply in relation to any related disposal by P or a person connected with P which occurs in an earlier tax year.
5
For the purposes of subsection (4)(b)—
a
unless the settlement met the all-employee benefit requirement by virtue of section 236L (cases in which all-employee benefit requirement treated as met) at the time of the disposal, that section does not apply for the purposes of determining whether the settlement continues to meet that requirement after the disposal, and
b
if, at the time of the disposal, the settlement met that requirement by virtue of section 236L and later continues to meet it otherwise than by virtue of that section, it may not again meet the requirement by virtue of that section.
6
A disposal in an earlier tax year is “related” to the disposal in question if—
a
both disposals are of ordinary share capital of the same company, or
b
the disposal in the earlier tax year is of ordinary share capital of a company which is, or at the time of that disposal was, a member of the same group as the company whose ordinary share capital is the subject of the disposal in question.
7
A claim under this section must include—
a
information to identify the settlement,
b
C’s name and the address of its registered office, and
c
the date of the disposal and the number of shares disposed of.
8
Section 236O makes provision about events which prevent a claim being made under this section and circumstances in which a claim is revoked.
Ss. 236H-236U and cross-heading inserted (with effect in accordance with Sch. 37 para. 2 of the amending Act) by Finance Act 2014 (c. 26), Sch. 37 para. 1 (with Sch. 37 paras. 3, 4)