Section 257DJ — Income Tax Act 2007: The number of employees requirement

The number of employees requirement 257DJ 1 If the issuing company is a single company, the full-time equivalent employee number for it must be less than 25 when the relevant shares are issued.

2 If the issuing company is a parent company, the sum of—

a the full-time equivalent employee number for it, and b the full-time equivalent employee numbers for each of its qualifying subsidiaries, must be less than 25 when the relevant shares are issued.

3 The full-time equivalent employee number for a company is calculated as follows— Step 1 Find the number of full-time employees of the company. Step 2 Add, for each employee of the company who is not a full-time employee, such fraction as is just and reasonable. The result is the full-time equivalent employee number.

4 In this section references to an employee—

a include a director, but b do not include—

i an employee on maternity , paternity , shared parental , parental bereavement or neonatal care leave, or ii a student on vocational training.