Section 138 | Treatment of employee share ownership trusts.

(1)The Inheritance Tax Act 1984 is amended as follows.

(2)In section 13 (dispositions by close companies for benefit of employees), in subsection (4), after paragraph (b) insert

(c)if the trusts are those of an employee share ownership plan approved under Schedule 8 to the Finance Act 2000, of any power to appropriate shares to, or acquire shares on behalf of, individuals under the plan.

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(3)In section 72 (property leaving employee trusts and newspaper trusts)—

(a)in subsection (2) after “subsection (4)" insert “ , (4A) ”, and

(b)after subsection (4) insert—

(4A)If the trusts are those of an employee share ownership plan approved under Schedule 8 to the Finance Act 2000, tax shall not be chargeable under this section by virtue of subsection (3)(b) above on an appropriation of shares to, or acquisition of shares on behalf of, an individual under the plan.

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(4)In section 86 (trusts for benefit of employees), in subsection (3), after paragraph (b) insert

(c)the trusts on which the settled property is held are those of an employee share ownership plan approved under Schedule 8 to the Finance Act 2000.

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