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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Gifts to employee trusts: persons qualifying: close companies

IHTA84/S13, TCGA92/S239 (1)(a)

A close company qualifies if the transfer falls within IHTA84/S13 and is therefore not a transfer of value for Inheritance Tax purposes. Any asset can qualify, unlike the position for individuals where the relief is restricted to gifts of shares and securities. However, the same restrictions as in CG36020 (c) and (d) apply, except that the trust can as an alternative be for the benefit of most of the employees of the company and of a subsidiary or subsidiaries taken as a single class.

The definition of close company is in TCGA92/S288. TCGA92/S239(8) expands that for the purposes of section 239 to include any company that would be close if it were resident in the UK.

As with transfers by individuals you must consult HMRC - IHT if you have any concerns about the application of IHTA84/S13. See CG 36101 for guidance on the procedure for contacting HMRC - IHT.