SCHEDULES

SCHEDULE 37Companies owned by employee-ownership trusts

PART 1Capital gains tax relief

Commencement and transitional provision

2

Subject to paragraph 3, the amendment made by paragraph 1 has effect in relation to disposals made on or after 6 April 2014.

3

In relation to disposals made on or after 6 April 2014 but before 26 June 2014, TCGA 1992 has effect as if—

(a)

in section 236H—

(i)

in subsection (4)(b), for the words from “at the time of the disposal” to the end there were substituted “ (see sections 236J to 236L) ”,

(ii)

subsection (4)(c)(ii) (and the “and” before it) were omitted, and

(iii)

subsections (5) and (8) were omitted,

(b)

in section 236N—

(i)

in subsection (1), for “Conditions A and B are” there were substituted “ Condition A is ”, and

(ii)

subsection (3) were omitted,

(c)

section 236O were omitted,

(d)

in section 236P—

(i)

in subsection (1) the words “, after the end of the tax year following the tax year in which the acquisition occurs, when” were omitted,

(ii)

for subsection (2) there were substituted—

“(2)

A “disqualifying event” occurs in relation to the acquisition if and when—

(a)

at any time after that tax year—

(i)

C ceases to meet the trading requirement, or

(ii)

the settlement ceases to meet the controlling interest requirement, or

(b)

at any time after the acquisition—

(i)

the settlement ceases to meet the all-employee benefit requirement,

(ii)

the participator fraction exceeds 2/5, or

(iii)

the trustees act in a way which the trusts, as required by the all-employee benefit requirement, do not permit.”, and

(iii)

in subsection (3) for “before” there were substituted “ after ”,

(e)

section 236Q(7) were omitted, and

(f)

section 236R were omitted.

4

(1)

For the purposes of determining if the requirement of section 236L(1)(c) of TCGA 1992 (requirement as to conduct of trustees for 12 months) is met, anything done by the trustees before 10 December 2013 is to be disregarded.

(2)

But sub-paragraph (1) does not apply in relation to section 236L of TCGA 1992 as applied by section 312E(3) of ITEPA 2003 (rules determining whether payment is a qualifying bonus payment for the purposes of Chapter 10A of Part 4 of ITEPA 2003).