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HMRC internal manual

Capital Gains Manual

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HM Revenue & Customs
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Reliefs: employee-ownership trusts: glossary

The definitions below apply for the purposes of the guidance on employee-ownership trusts in CG67800+, and are based on the provisions of TCGA92/Ss236H – 236U.          

Authorised transfer                   Defined at TCGA/S236J(7), see CG67836.

Company                                  The meaning is given by TCGA92/S170(9), more details of which are at CG45105.

Connected persons                    In deciding if one person is connected with another, TCGA92/S286 applies with the modification that relative means brother, sister, ancestor, lineal descendant, uncle, aunt, nephew and niece.  Guidance on the unmodified interpretation of ‘connected persons’ is at CG14580+.

Disqualifying events                  Occur in the situations set out in TCGA92/Ss236O, 236P and 236R, and result in the denial and withdrawal of relief.  Guidance on this point is at CG67860+.

Eligible employee                      Defined at TCGA92/S236J(3), see CG67838.

Equality requirement                This is an element of the ‘all-employee benefit requirement’. It is introduced by TCGA92/S236J(1)(a) and further explained at TCGA92/S236K, see CG67837+.

Excluded participator                Defined at TCGA92/S236J(5), see CG67839.

Group                                       This is to be construed in accordance with TCGA92/S170(3)-(9).  Guidance on this point is at CG45110+.

Member of a group                   This is to be construed in accordance with TCGA92/S170(3)-(9).  Guidance on this point is at CG45110, CG45120 and CG45125.

Ordinary share capital               The meaning is given by CTA10/S1119.  It is all the company’s issued share capital (however described), other than capital the holders of which have a right to a dividend at a fixed rate but have no other right to share in the company’s profits.

Principal company of a group    This is to be construed in accordance with TCGA92/S170(3)-(9).  Guidance on this point is at CG45110.

Significant interest                    Defined at TCGA92/S236L(2), see CG67846.

Trade                                       This means any trade which is conducted on a commercial basis and with a view to the realisation of profits.

Transferring trustee                  Defined at TCGA92/S236Q(1)(a), see CG67865.

 

The relief requirements, see CG67820, that have to be met before any relief can be claimed are as follows.  

Trading                                     Defined at TCGA92/S236I, see CG67821.

All-employee benefit                 Defined at TCGA92/S236J, see CG67822.

Controlling interest                   Defined at TCGA92/S236M, see CG67850.

Limited participation                 Defined at TCGA92/S236N, see CG67855.

Related disposal                        Defined at TCGA92/S236H(6), see CG67825.