Section 53 | Approved profit sharing schemes: loan arrangements.

(1)In paragraph 2 of Schedule 9 to the Taxes Act 1988 (conditions for approval of share option schemes and profit sharing schemes), after sub-paragraph (2) insert—

(2A)The Board shall not approve a profit sharing scheme unless they are satisfied—

(a)that the arrangements for the scheme do not make any provision, and are not in any way associated with any provision made, for loans to some or all of the employees of—

(i)the company that established the scheme, or

(ii)in the case of a group scheme, any participating company, and

(b)that the operation of the scheme is not in any way associated with such loans.

(2B)For the purposes of sub-paragraph (2A) above “arrangements” includes any scheme, agreement or understanding, whether or not legally enforceable.

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(2)In paragraph 3(2) of that Schedule (withdrawal of approval of profit sharing schemes), before paragraph (d) insert—

(ca)the Board—

(i)cease to be satisfied of the matters mentioned in paragraph 2(2A) above, or

(ii)in the case of a scheme approved before 21st March 2000, are not satisfied of those matters; or

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(3)This section shall be deemed to have come into force on 21st March 2000.