CG67890 | 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. HMRC guidance on the meaning of “ordinary share capital” can be found in the Company Taxation Manual at pages CTM00511 to 00516.

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.