Section 59 | EBTs: restriction on proportion of beneficiaries who may be participators etc

(1)IHTA 1984 is amended as follows.

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

(4A)Subsection (4)(a) does not apply if, immediately after the disposition of property mentioned in subsection (1), more than 25% of relevant beneficiaries are (disregarding subsection (4)(a)) persons falling within subsection (2)(a) to (d).

(4B)In subsection (4A) “relevant beneficiary” means a person who—

(a)is a person for whose benefit the trusts permit the property to be applied, and

(b)is a person employed by or holding office with the company mentioned in subsection (1).

.

(3)In section 28 (employee trusts), after subsection (6) insert—

(6A)Subsection (6) does not apply if, immediately after the transfer of value mentioned in subsection (1), more than 25% of relevant beneficiaries are (disregarding subsection (6)) persons falling within subsection (4)(a) to (d).

(6B)In subsection (6A) “relevant beneficiary” means a person who—

(a)is a person for whose benefit the trusts permit the settled property to be applied, and

(b)is a person employed by or holding office with the company mentioned in subsection (1).

.

(4)In section 75 (exemption from charge under section 65 where property becomes subject to employee benefit trust), in subsection (3), in the opening words, after “section 28(4)” insert “and (6A)”.

(5)This section is treated as having come into force on 30 October 2024.