1TCGA 1992 is amended as follows.
2(1)In section 236H(4) (disposals to employee-ownership trusts), before paragraph (a) insert—
“(za)that the trustees of the settlement are resident in the United Kingdom at the time of the disposal and continue to be UK resident for the remainder of the tax year in which that time falls,”.
(2)In section 236O(2) (no section 236H relief if disqualifying event in next tax year), before paragraph (a) insert—
“(za)the trustees of the settlement cease to be resident in the United Kingdom,”.
(3)In section 236P (events which trigger deemed disposal and reacquisition by trustees), after subsection (3) insert—
“(3A)See also section 80 (trustees ceasing to be resident in U.K.), which provides for similar consequences in circumstances where the trustees of the settlement cease to be resident in the United Kingdom.”
(4)In section 236Q(1)(c) (relief for deemed disposals under section 71), for “236H(4)(a)” substitute “236H(4)(za)”.
(5)The amendments made by this paragraph have effect in relation to disposals made on or after 30 October 2024.
3(1)In section 236H(4), after paragraph (b) insert—
“(ba)that the settlement meets the trustee independence requirement (see section 236LA) at the time of the disposal and continues to meet that requirement for the remainder of the tax year in which that time falls,”.
(2)After section 236L insert—
(1)A settlement meets the trustee independence requirement if—
(a)less than 50% of the trustees are persons who are excluded participators, and
(b)excluded participators do not have control of the settlement.
(2)In this section “excluded participator” means—
(a)a person that is an excluded participator within the meaning given by section 236J, other than a person who is an excluded participator only as a result of a connection falling within section 286(3) (trustees regarded as connected with settlors etc), or
(b)a company not falling within paragraph (a), if 50% or more of its directors are persons falling within that paragraph.
(3)Excluded participators have control of the settlement if one or more excluded participators, acting alone or together without the trustees who are not excluded participators, have power under the trust instrument or by law to—
(a)dispose of, advance, lend, invest, pay or apply settlement property;
(b)vary or terminate the settlement;
(c)add or remove a person as a beneficiary or to or from a class of beneficiaries;
(d)appoint or remove trustees or give another individual control over the settlement;
(e)direct the exercise of a power mentioned in sub-paragraphs (a) to (d).”
(3)In section 236O(2), after paragraph (b) insert—
“(ba)the settlement ceases to meet the trustee independence requirement,”.
(4)In section 236P(2) (events which trigger deemed disposal and reacquisition by trustees), after paragraph (b) insert—
“(ba)the settlement ceases to meet the trustee independence requirement,”.
(5)The amendments made by this paragraph have effect in relation to disposals made on or after 30 October 2024.
4(1)In section 236O, after subsection (2) insert—
“(2A)Where—
(a)a disqualifying event falling within subsection (2)(za) occurs (trustees cease to be resident in the United Kingdom),
(b)the event only occurs as a result of the death of a trustee of the settlement, and
(c)within the period of 6 months beginning with the death of the trustee, the trustees become resident in the United Kingdom,
the disqualifying event is to be ignored.
(2B)Where—
(a)a disqualifying event falling within subsection (2)(ba) occurs (trustee independence requirement ceases to be met),
(b)the event only occurs as a result of—
(i)the death of a trustee of the settlement, or
(ii)the death of a director of a company that is a trustee of the settlement, and
(c)within the period of 6 months beginning with that death, the settlement meets the trustee independence requirement,
the disqualifying event is to be ignored.”
(2)In section 236P, after subsection (2) insert—
“(2A)Where—
(a)a disqualifying event falling within subsection (2)(ba) occurs (trustee independence requirement ceases to be met),
(b)the event only occurs as a result of—
(i)the death of a trustee of the settlement, or
(ii)the death of a director of a company that is a trustee of the settlement, and
(c)within the period of 6 months beginning with that death, the settlement meets the trustee independence requirement,
the disqualifying event is to be ignored.”
(3)The amendments made by this paragraph have effect in relation to disposals made on or after 30 October 2024.
5(1)In section 236H(4), after paragraph (c) insert—
“(ca)that the trustees have taken all reasonable steps to secure that—
(i)the consideration for the disposal does not exceed the market value of the ordinary share capital at the time of the disposal, and
(ii)where some or all of the consideration for the disposal is deferred, that the rate of any interest payable in relation to the deferral does not exceed a reasonable commercial rate,”.
(2)In section 236Q, in subsection (1)(c), for “(d)” substitute “(c) and (d)”.
(3)The amendments made by this paragraph have effect in relation to disposals made on or after 30 October 2024.
6(1)In section 236O—
(a)in the heading, for “tax year” substitute “four tax years”, and
(b)in subsection (1)(b), for “the tax year” substitute “any of the first four tax years”.
(2)In section 236P(1), after “end of the” insert “fourth”.
(3)In section 236R—
(a)in the heading, for “tax year” substitute “four tax years”, and
(b)in subsection (1)(b), for “the tax year” substitute “any of the first four tax years”.
(4)The amendments made by this paragraph have effect in relation to disposals made on or after 30 October 2024.
7(1)In section 236H—
(a)in subsection (7)—
(i)omit the “and” after paragraph (b),
(ii)after that paragraph insert—
“(ba)the number of persons who at the time of the disposal are employees of—
(i)C, or
(ii)if C is the principal company of a trading group (within the meaning of section 236I(3)), any member of that group,”, and
(iii)after paragraph (c) insert “, and
(d)the consideration for the disposal (including amounts of consideration due after the disposal).”, and
(b)after that subsection insert—
“(7A)But where the person making the claim is unable to include the number of employees in the claim as required by subsection (7)(ba) because they have been unable to ascertain that number, that requirement is to be taken to be met if—
(a)the person has taken all reasonable steps to ascertain that number, and—
(b)the claim contains a statement that the person has taken such steps.”
(2)In section 236Q—
(a)in subsection (6)—
(i)omit the “and” after paragraph (b), and
(ii)after that paragraph insert—
“(ba)the number of persons who at the time of the deemed disposal are employees of—
(i)the company, or
(ii)if the company is the principal company of a trading group (within the meaning of section 236I(3)), any member of that group, and”, and
(b)after that subsection insert—
“(6A)But where the person making the claim is unable to include the number of employees in the claim as required by subsection (6)(ba) because they have been unable to ascertain that number, that requirement is to be taken to be met if—
(a)the person has taken all reasonable steps to ascertain that number, and—
(b)the claim contains a statement that the person has taken such steps.”
(3)The amendments made by this paragraph have effect in relation to claims made under those sections on or after 6 April 2025.