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HMRC internal manual

Employee Tax Advantaged Share Scheme User Manual

Schedule 2 share incentive plan (SIP): Shares that may be awarded: Close company

Further to the guidance at ETASSUM23220, which in respect of a close company states: close company has the meaning given by Section 989 ITA 2007. Guidance on these sections is at http://www.hmrc.gov.uk/manuals/ctmanual/CTM60100.htm.

For the purposes of this section a company is not a close company if it is subject to an employee-ownership trust (paragraph 27(3) - (6)).

An overseas company which is wholly owned by an overseas Government would not be considered to be a close company if it were resident in the UK. But if the overseas Government is only a majority shareholder, and does not own the whole of the share capital of the company in question, the advice of the appropriate H.O. specialist should be sought on whether it would be close.