Section 551 — Income Tax (Earnings and Pensions) Act 2003: “Qualifying disposals” for purposes of section 550

“Qualifying disposals” for purposes of section 550 551 1 For the purposes of section 550 (meaning of “employee benefit trust”) a “qualifying disposal” is a disposal of property consisting of—

a any of the ordinary share capital of the company, or b money paid outright, where any of conditions 1, 2 and 3 is met.

2 Condition 1 is that the property has been applied for the benefit of—

a individual employees or former employees of the company, b spouses or civil partners , former spouses or civil partners , widows or widowers or surviving civil partners of employees or former employees of the company, c dependants of persons within paragraph (a), or d relatives, or spouses or civil partners 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 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 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.