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(c) dependants of persons within paragraph (a), or | |
(d) relatives, or spouses of relatives, of persons within paragraph (a) or (b). | |
(3) In subsection (2) each reference to the company includes a reference to a | |
company controlled by the company. | |
(4) Condition 2 is that the property has been applied for charitable purposes. | 5 |
(5) Condition 3 is that the property has been transferred to— | |
(a) the trustees of another employee benefit trust, | |
(b) the trustees of a qualifying employee share ownership trust (within the | |
meaning of Schedule 5 to FA 1989), or | |
(c) the trustees of a profit sharing scheme approved under Schedule 9 to | 10 |
ICTA (approved share option schemes and profit sharing schemes). | |
(6) In this section “relative” means— | |
(a) parent, child or remoter relation in the direct line, or | |
(b) brother, sister, uncle, aunt, nephew or niece. | |
Attribution of interests in company | 15 |
552 Attribution of interest in company to beneficiary or associate | |
(1) This section applies if— | |
(a) after 13th March 1989 B, or an associate of B’s, has received a payment | |
(“the relevant payment”) from the trustees of the employee benefit | |
trust, and | 20 |
(b) at any time during the period of 3 years ending with the day on which | |
the relevant payment was received (“the payment date”), the property | |
subject to the trust consisted of or included any part of the ordinary | |
share capital of the company. | |
(2) In such a case B or the associate is to be treated for the purposes of the listed | 25 |
provision as having been the beneficial owner of the appropriate percentage of | |
the ordinary share capital of the company on the payment date. | |
(3) This is in addition to any percentage of that share capital of which B or the | |
associate was actually the beneficial owner on that date. | |
(4) Section 553 explains what is meant by “the appropriate percentage”. | 30 |
553 Meaning of “appropriate percentage” for purposes of section 552 | |
(1) For the purposes of section 552 “the appropriate percentage” is—![equation: over[cross[char[P],num[100.00000000,"100"]],char[D]]](missing.gif) | |
where P and D have the meaning given by the following provisions. | |
(2) Unless subsection (3) applies, P is the aggregate of the relevant payment and | |
any other payments received by B or associates of B’s from the trustees of the | 35 |
trust during the period of 12 months ending with the payment date. | |
(3) If— | |
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(a) any distributions were made to the trustees of the trust by the company | |
in respect of its ordinary share capital during the period of 3 years | |
ending with the payment date, and | |
(b) the aggregate of those distributions is less than the aggregate | |
mentioned in subsection (2), | 5 |
P is the aggregate of those distributions. | |
(4) Unless subsection (5) applies, D is the amount determined as follows— | |
Step 1 | |
Calculate the aggregate of— | |
(a) any distributions made by the company in respect of its ordinary share | 10 |
capital during the period of 12 months ending with the payment date, | |
(b) any distributions so made during the period of 12 months immediately | |
preceding that mentioned in paragraph (a), and | |
(c) any distributions so made during the period of 12 months immediately | |
preceding that mentioned in paragraph (b). | 15 |
Step 2 | |
Divide the aggregate so calculated by the number of the periods mentioned in | |
paragraphs (a) to (c) in which distributions were so made. | |
(5) If no distributions were so made during any of those periods, D is 1. | |
(6) In this section “the payment date” and “the relevant payment” have the | 20 |
meaning indicated in section 552(1). | |
554 Attribution of further interest in company | |
(1) This section applies if— | |
(a) B or an associate of B’s is (apart from this section) to be treated by virtue | |
of section 552(2) as having been the beneficial owner of a percentage of | 25 |
the ordinary share capital of the company as a result of receiving the | |
relevant payment from the trustees of an employment benefit trust, and | |
(b) B or an associate of B’s has, during the period of 12 months ending with | |
the payment date, received one or more payments from the trustees of | |
any other employee benefit trust or trusts connected with the company. | 30 |
(2) In such a case section 552 applies to B or (as the case may be) the associate | |
mentioned in subsection (1) (a) as if B or the associate had received— | |
(a) any payment from the trustees of a trust as mentioned in subsection | |
(1)(b), or | |
(b) where more than one payment has been received from the trustees of a | 35 |
trust, the last of the payments, | |
on the payment date. | |
(3) B or the associate is accordingly to be treated for the purposes of the listed | |
provision as having been the beneficial owner on the payment date of both— | |
(a) the percentage of the ordinary share capital of the company mentioned | 40 |
in subsection (1)(a), and | |
(b) the appropriate percentage of that share capital as determined in | |
accordance with subsection (2). | |
(4) This is in addition to any percentage of that share capital of which B or the | |
associate was actually the beneficial owner on that date. | 45 |
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(5) For the purposes of this section a trust is “connected with” the company if, at | |
any time during the period of 3 years ending with the payment date, the | |
property subject to the trust consisted of or included any part of the ordinary | |
share capital of the company. | |
(6) In this section “the payment date” and “the relevant payment” have the | 5 |
meaning indicated in section 552(1). | |
Part 8 | |
Former employees: deductions for liabilities | |
Deductions from total income | |
555 Former employee entitled to deduction from total income | 10 |
(1) This Part applies if— | |
(a) a former employee makes a deductible payment, or | |
(b) a former employer makes a deductible payment on behalf of a former | |
employee and the payment is treated— | |
(i) as a relevant retirement benefit, or | 15 |
(ii) as post-employment earnings, | |
of the former employee. | |
(2) A deduction of the amount of the deductible payment may be made when | |
computing the former employee’s total income for the tax year in which the | |
payment is made. | 20 |
(3) Subsection (2) applies only if the former employee makes a claim to the | |
deduction. | |
(4) The entitlement to a deduction under this section is subject to sections 556 and | |
557. | |
(5) For the application of this Part in relation to former office-holders, see section | 25 |
564. | |
(6) For relief from capital gains tax where the amount of the deduction allowed | |
under this section exceeds total income, see section 263ZA of TCGA 1992. | |
556 Deductible payments made outside the time limits allowed | |
(1) No deduction may be made under section 555 if the deductible payment is | 30 |
made— | |
(a) on or before the day on which the former employee ceased to hold the | |
former employment, or | |
(b) after the end of the sixth tax year following the tax year in which the | |
former employee ceased to hold the former employment. | 35 |
(2) If subsection (1)(a) applies, see section 346. | |
557 Deductible payments wholly or partly borne by the former employer etc. | |
(1) This section applies if— | |
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(a) a deductible payment is made by the former employee (and not by the | |
former employer on behalf of the former employee), but | |
(b) the whole or a part of the cost of making the payment is borne— | |
(i) by the former employer, or | |
(ii) out of the proceeds of a contract of insurance. | 5 |
(2) No deduction of the amount of the cost borne as mentioned in subsection (1)(b) | |
(the “relevant amount”) may be made under section 555. | |
(3) But this is subject to subsection (4) if the whole or a part of the relevant amount | |
is treated— | |
(a) as a relevant retirement benefit of the former employee, or | 10 |
(b) as post-employment earnings of the former employee. | |
(4) In such a case, a deduction of so much of the relevant amount as is treated in | |
that way may be made under section 555. | |
Interpretation | |
558 Meaning of “deductible payment” | 15 |
(1) For the purposes of this Part each of the following is a deductible payment— | |
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A. Payment in or towards the discharge of a liability related to the former | |
employment. | |
| 20 |
B. Payment of any costs or expenses incurred in connection with— | |
(a) a claim that the former employee is subject to a liability related | |
to the former employment, or | |
(b) proceedings relating to or arising out of a claim that the former | |
employee is subject to a liability related to the former | 25 |
employment. | |
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C. Payment of a premium under a qualifying insurance contract, but only to the | |
extent that the premium relates to— | |
(a) provision in the contract for the former employee to be | 30 |
indemnified against a payment falling within paragraph A, or | |
(b) provision in the contract for the payment of any costs or | |
expenses falling within paragraph B. | |
(2) But a payment which falls within paragraph A or B is not a deductible payment | |
if it would have been unlawful for the former employer to enter into a contract | 35 |
of insurance in respect of the liability, or costs or expenses, in question. | |
(3) In this Part— | |
(a) “premium”, in relation to a qualifying insurance contract, means an | |
amount payable to the insurer under the contract, and | |
(b) where a qualifying insurance contract relates to more than one person, | 40 |
employment or risk, the part of the premium to be treated as relating to | |
each of them is to be determined by apportionment on a just and | |
reasonable basis. | |
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