CG61974 | Roll-over relief on transfer of shares to Share Incentive Plan: disposal conditions: trustees’ 10 percent stake

To qualify for relief, the trustees must hold shares that make up at least 10 per cent of the ordinary share capital of the company and carry rights to at least 10 per cent

• of any profits available for distribution to shareholders

and

• of any assets of the company available for distribution to shareholders on a winding up.

In deciding whether these tests are met, you include all the participants’ plan shares that are still subject to the Share Incentive Plan together with any shares that the trustees hold but have not awarded to participants.

The trustees must hold this minimum stake either:

• immediately after the disposal for which relief is claimed

or

• at any time in the twelve months after the disposal.

There is no requirement that the trustees need hold the 10 per cent minimum stake throughout this twelve month period.

The ordinary share capital of the company means all the issued share capital of that company, other than any fixed rate dividend capital.

Where the company has more than one class of issued share, the 10 per cent test is applied to the total issued share capital, not to each class of shares.

If, therefore, a company has issued 100 A shares and 100 B shares, the minimum stake is (10 per cent of 200) 20, irrespective of whether these are A or B shares.