1(1)Part 3 of Schedule 15 to FA 2000 (requirements as to issuing company) is amended as follows.U.K.
(2)In paragraph 15 (introduction to Part) after paragraph (f) insert—
“(fa)number of employees (see paragraph 22A); and”.
(3)After paragraph 22 insert—
22A(1)If the issuing company is a single company, the full-time equivalent employee number for it must be less than 50 when the relevant shares are issued.
(2)If the issuing company is a parent company, the sum of—
(a)the full-time equivalent employee number for it, and
(b)the full-time equivalent employee numbers for each of its qualifying subsidiaries,
must be less than 50 when the relevant shares are issued.
(3)The full-time equivalent employee number for a company is calculated as follows—
Step 1
Find the number of full-time employees of the company.
Step 2
Add, for each employee of the company who is not a full-time employee, such fraction as is just and reasonable.
The result is the full-time equivalent employee number.
(4)In this paragraph references to an employee—
(a)include a director, but
(b)do not include—
(i)an employee on maternity or paternity leave, or
(ii)a student on vocational training.”
(4)The amendments made by this paragraph do not have effect in relation to shares issued before the day on which this Act is passed.
2(1)Chapter 4 of Part 5 of ITA 2007 (the issuing company) is amended as follows.U.K.
(2)In section 180 (overview of Chapter 4), after paragraph (e) insert—
“(ea)number of employees (see section 186A),”.
(3)After section 186 insert—
(1)If the issuing company is a single company, the full-time equivalent employee number for it must be less than 50 when the relevant shares are issued.
(2)If the issuing company is a parent company, the sum of—
(a)the full-time equivalent employee number for it, and
(b)the full-time equivalent employee numbers for each of its qualifying subsidiaries,
must be less than 50 when the relevant shares are issued.
(3)The full-time equivalent employee number for a company is calculated as follows—
Step 1
Find the number of full-time employees of the company.
Step 2
Add, for each employee of the company who is not a full-time employee, such fraction as is just and reasonable.
The result is the full-time equivalent employee number.
(4)In this section references to an employee—
(a)include a director, but
(b)do not include—
(i)an employee on maternity or paternity leave, or
(ii)a student on vocational training.”
(4)The amendments made by this paragraph do not have effect in relation to—
(a)shares issued before the day on which this Act is passed, or
(b)shares issued to the managers of an approved fund which closed before that day.
(5)For the purposes of sub-paragraph (4)(b)—
(a)“the managers of an approved fund” has the same meaning as in section 251 of ITA 2007, and
(b)the reference to shares issued to the managers of an approved fund is to shares issued to those managers as nominee for an individual who has invested in the fund.
3(1)Part 6 of ITA 2007 is amended as follows.U.K.
(2)In section 286(3) (qualifying holdings: introduction) after paragraph (j) insert—
“(ja)number of employees (see section 297A),”.
(3)After section 297 insert—
(1)If the relevant company is a single company, the full-time equivalent employee number for it must be less than 50 when the relevant holding is issued.
(2)If the relevant company is a parent company, the sum of—
(a)the full-time equivalent employee number for it, and
(b)the full-time equivalent employee numbers for each of its qualifying subsidiaries,
must be less than 50 when the relevant holding is issued.
(3)The full-time equivalent employee number for a company is calculated as follows—
Step 1
Find the number of full-time employees of the company.
Step 2
Add, for each employee of the company who is not a full-time employee, such fraction as is just and reasonable.
The result is the full-time equivalent employee number.
(4)In this section references to an employee—
(a)include a director, but
(b)do not include—
(i)an employee on maternity or paternity leave, or
(ii)a student on vocational training.”
(4)In section 327 (certain requirements of Chapter 4 to be treated as met)—
(a)in subsection (1), at the end insert “ , and section 297A (the number of employees requirement). ”;
(b)in subsection (4)(b) for “and 297” substitute “ , 297 and 297A ”.
(5)This paragraph is deemed to have come into force on 6th April 2007.
(6)The amendments made by this paragraph do not have effect in relation to—
(a)a relevant holding issued before that date, or
(b)a relevant holding acquired by a company (“the investing company”) [F1before 6 April 2018] by means of the investment of protected money.
(7)For the purposes of sub-paragraph (6)(b), “protected money” is—
(a)money raised by the issue before 6th April 2007 of shares in or securities of the investing company, or
(b)money derived from the investment of such money.
Textual Amendments
F1Words in Sch. 16 para. 3(6)(b) inserted (6.4.2018) by Finance Act 2018 (c. 3), Sch. 5 paras. 9, 13; S.I. 2018/931, reg. 4(e)