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HMRC internal manual

Capital Gains Manual

Reliefs: employee-ownership trusts: conditions: the 'all-employee benefit requirement': cases in which the requirement is treated as met: 'application of settled property' condition

TCGA92/S236L(1)(c) and FA14/Sch37, Para 4

The ‘application of settled property’ condition is the principal behavioural condition which the trustees of a settlement created before 10 December 2013 must meet in order for the settlement to be treated as meeting the ‘all-employee benefit requirement’, see CG67844.  This condition is met at a particular time if during the 12 months ending with that time the trustees do not

  • Apply any of the settled property otherwise than for the benefit of all eligible employees on the same terms.  This is known as the ‘behaviour requirement’ and is covered in more detail in CG67848.
  • Apply any of the settled property by creating a trust.
  • Apply any of the settled property by transferring property to the trustees of any settlement other than by an ‘authorised transfer’, see CG67836.
  • Make loans to beneficiaries of the trusts of the settlement.

For these purposes, but no others, anything done by the trustees before 10 December 2013 is to be disregarded.