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HMRC internal manual

Inheritance Tax Manual

From
HM Revenue & Customs
Updated
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Employee benefit trusts: specific schemes: approved all employee share plans

FA2000 extended exemption from Inheritance Tax (parallel to the exemption for approved profit sharing schemes (IHTM42940)) to employee share ownership plans approved under FA2000/Sch8.

These were replaced by share incentive plans under ITEPA2003/Sch 2 and these automatically satisfy IHTA84/S86 by virtue of IHTA84/S86(3)(c) so property held in a share incentive plan is not subject to the relevant property charges that would otherwise apply to property of a discretionary trust.

Transfers from a close company to a share incentive plan are not chargeable to Inheritance Tax by virtue of IHTA84/S13(4)(c) even though the plan potentially benefits ‘participators’ in the close company.

Transfers from a share incentive plan are not chargeable to Inheritance Tax by virtue of IHTA84/S72(4A) even though the transfer may be to a participator in a close company which sponsors the plan.