Commentary

C3.1915 CGT reliefs—disposals to employee-ownership trusts

Capital gains tax
Capital gains tax | Commentary

C3.1915 CGT reliefs—disposals to employee-ownership trusts

Capital gains tax | Commentary

C3.1915 CGT reliefs—disposals to employee-ownership trusts

Finance Act 2014 introduced a package of measures to support employee ownership which include reliefs from income tax, capital gains tax and inheritance tax. The capital gains tax relief provides that, if the qualifying criteria are met, disposals of ordinary shares in a company on or after 6 April 20141 by a person other than a company to certain employee-ownership trusts will be deemed to be for a consideration which gives rise to no gain/no loss2. Company is as defined in TCGA 1992, s 170(9)3 (see D2.305), and ordinary shares capital is as defined in CTA 2010, s 1119 (see D2.108).

Although the provisions exclude a disposal by a company, corporate trustees can still make a claim4.

For the relief to apply the following requirements must be met5:

  1.  

    (a)     the company (C) must be either a trading company which is not a member of a group, or be the principal company of a trading group, from the time of the disposal to the end of the tax year in which the disposal takes place

  2.  

    (b)     the settlement must meet the 'all-employee benefit requirement' from the time of the disposal to the end of the tax year in which the disposal takes place (for disposals from 6 April 2014 to 25 June 2014 the settlement had to meet the all-employee benefit requirement at the time of disposal)6

  3.  

    (c)     the settlement must begin to meet the 'controlling interest requirement' during the tax year of disposal and continue to

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