511A Shares acquired from an employee share ownership trust

Summary

This section ensures that the three year retention period for which shares must be held to benefit from the tax relief will be satisfied by a combination of the time the shares are held in an Employee Share Ownership Trust (ESOT) and in an Approved Profit Sharing Scheme (APSS).

Details

(1) This section, comprising 2 subsections, applies where on or after the passing of the Finance Act 1998 —

1. shares are appropriated by an APSS to a participant,
2. those shares had been transferred by an ESOT to that APSS, and
3. the person was a beneficiary of the ESOT at all times during a “holding period”, which is defined as a period beginning on the later of the day the shares were acquired or the person became a beneficiary and ending on the day the shares were appropriated. The reference to “at all times” excludes the 30 day period which is allowed during which a person may remain a participant in an APSS after ceasing to be a beneficiary of the ESOT.

(2) For the purposes of section 511 —

1. the period of retention ends —
   1. where the holding period is 2 years or more on the day following the end of the holding period, and
   2. where the holding period is less than 2 years, 2 years after the beginning of the holding period, or earlier if the person retires, is made redundant or dies, and
2. the release date means —
   1. where the holding period is 3 years or more, on the day following the end of the holding period, and
   2. where the holding period is less than 3 years, 3 years after the beginning of the holding period.

Relevant Date: Finance Act 2021