Q&As

If an EBT trustee holds shares on bare trust for an employee, can entrepreneurs' relief be available?

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Published on LexisPSL on 21/11/2018

The following Share Incentives Q&A provides comprehensive and up to date legal information covering:

  • If an EBT trustee holds shares on bare trust for an employee, can entrepreneurs' relief be available?

In order for capital gains tax (CGT) entrepreneurs' relief (ER) to apply, the requirements set out under sections 169H–169SA of the Taxation of Chargeable Gains Act 1992 (TCGA 1992) will need to be met.

In summary, in the context of an employee's shares in their employer, the relevant employee will need to:

  1. be an employee or officer of the company (or, if the company is the holding company of a trading group) of another company in the group

  2. hold at least 5% of the company's ordinary share capital and, by virtue of that holding, at least 5% of the company's voting rights, and

  3. for disposals occurring on or after 29 October 2018, they must also be beneficially entitled to at least 5% of the profits available for distribution to the equity holders of the comp

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