Reliefs: employee-ownership trusts: the new rules
TCGA92/S236H(2)-(3) and S236Q(2)-(3)
Where a disposal qualifies for relief, this is given by the relevant disposal and acquisition being treated for the purposes of TCGA92 as being made for consideration that gives rise to neither a gain nor a loss on the disposal. The ‘market value’ rule in TCGA92/S17(1) does not apply to such disposals.
The basic requirements of the relief are that
- a person other than a company, referred to as ‘P’,
- disposes of ordinary share capital of a company, referred to as ‘C’, to the trustees of a settlement,
- the ‘relief requirements’ are all met, and
- P makes a claim.
Relief is also available where there is a deemed disposal by reason of the trustees of a settlement becoming absolutely entitled as against the trustees of settled property (‘the transferring trustee’) and
- that settled property is the ordinary share capital of a company,
- the relevant ‘relief requirements’ are met, and
- the ‘transferring trustee’ makes a claim.
Although TCGA92/S236H(1)(a) states that P cannot be a company, this does not apply to corporate trustees who can still make a claim.