Policy paper

Draft legislation (accessible version of Employee Benefit Trusts)

Updated 6 November 2024

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Draft Finance Bill Measures

1 EBTs: restriction on proportion of beneficiaries who may be participators etc

  1. (1) IHTA 1984 is amended as follows.
  2. (2) In section 13 (dispositions by close companies for benefit of employees), after subsection (4) insert 바카라 사이트�
    1. 바카라 사이트�(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).
    2. (4B) In subsection (4A) 바카라 사이트渞elevant beneficiary바카라 사이트� means a person who 바카라 사이트�
      1. (a) is a person for whose benefit the trusts permit the property to be applied, and
      2. (b) is a person employed by or holding office with the company mentioned in subsection (1).바카라 사이트�.
  3. (3) In section 28 (employee trusts), after subsection (6) insert 바카라 사이트�
    1. 바카라 사이트�(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).
    2. (6B) In subsection (6A) 바카라 사이트渞elevant beneficiary바카라 사이트� means a person who 바카라 사이트�
      1. (a) is a person for whose benefit the trusts permit the settled property to be applied, and
      2. (b) is a person employed by or holding office with the company mentioned in subsection (1).바카라 사이트�.
  4. (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 바카라 사이트渟ection 28(4)바카라 사이트� insert 바카라 사이트渁nd (6A)바카라 사이트�.
  5. (5) This section is treated as having come into force on 30 October 2024.

2 EBTs: shares entering trust to have been held for two years

  1. (1) IHTA 1984 is amended as follows.
  2. (2) In section 28 (employee trusts) 바카라 사이트�
    1. (a) in subsection (1), after paragraph (b) insert 바카라 사이트�, and
      1. (c) the individual has, throughout the period of two years ending with the date of the transfer, been beneficially entitled to the shares in or securities of the company that become comprised in the settlement.바카라 사이트�;
    2. (b) after subsection (7) insert 바카라 사이트�
      1. 바카라 사이트�(8) A reference in subsection (1)(c) to shares in or securities of a company includes, in a case in which a reorganisation of share 25 October 2024 2 Draft Finance Bill Measures capital has occurred, the original shares to which the new holding relates.
      2. (9) In subsection (8) 바카라 사이트�
        1. (a) 바카라 사이트渞eorganisation of share capital바카라 사이트� means a transaction to which section 127 of the 1992 Act (equation of original shares and new holding) applies or would apply but for section 134 of that Act;
        2. (b) 바카라 사이트渢he original shares바카라 사이트� and 바카라 사이트渢he new holding바카라 사이트� have the meaning given by section 126(1) of the 1992 Act.바카라 사이트�.
  3. (3) In section 75 (exemption from charge under section 65 where property becomes subject to employee benefit trust) 바카라 사이트�
    1. (a) in subsection (2), after paragraph (c) insert 바카라 사이트�; and
      1. (d) the shares in or securities of the company have been comprised in the settlement mentioned in section 65(1) throughout the period of two years ending with the date on which they cease to be relevant property.바카라 사이트�;
    2. (b) after subsection (3) insert 바카라 사이트�
      1. 바카라 사이트�(4) A reference in subsection (2)(d) to shares in or securities of a company includes, in a case in which a reorganisation of share capital has occurred, the original shares to which the new holding relates.
      2. (5) In subsection (4) 바카라 사이트�
        1. (a) 바카라 사이트渞eorganisation of share capital바카라 사이트� means a transaction to which section 127 of the 1992 Act (equation of original shares and new holding) applies or would apply but for section 134 of that Act;
        2. (b) 바카라 사이트渢he original shares바카라 사이트� and 바카라 사이트渢he new holding바카라 사이트� have the meaning given by section 126(1) of the 1992 Act.바카라 사이트�.
  4. (4) This section is treated as having come into force on 30 October 2024.
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