Finance Act, 2001
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Provisions relating to certain approved profit sharing schemes and employee share ownership trusts. |
17.—(1) The Principal Act is amended— | |
(a) in section 511A— | ||
(i) by the insertion in subsection (2)(c) of “or paragraph 11A, as the case may be,” after “paragraph 11”, and | ||
(ii) by the insertion in subsection (5) of “or paragraph 11A, as the case may be,” after “paragraph 11”, | ||
(b) in Schedule 11— | ||
(i) in paragraph 4— | ||
(I) by the insertion in subparagraph (1A)(a)(i) of “, having regard to subparagraph (1B),” after “subparagraph (1)”, and | ||
(II) by the insertion of the following subparagraph after subparagraph (1A): | ||
“(1B) As respects a scheme which has been established by a relevant company (within the meaning of paragraph 1 of Schedule 12)— | ||
(a) any reference in subparagraph (1)(a)(ii) to an employee or a full-time director shall be deemed to be a reference to an individual who was such an employee or a full-time director, as the case may be, of that relevant company or of a company within the relevant company's group (within the meaning of paragraph 1(3A) of Schedule 12) on the day the scheme was established, and | ||
(b) for the purposes of satisfying the qualifying period requirement referred to in subparagraph (1)(b), such periods in which an individual was or is an employee or a director of a company referred to in subparagraphs (3)(b) and (13) of paragraph 11A of Schedule 12 shall also be taken into account.”, | ||
(ii) in paragraph 12A by the insertion in subparagraph (b) of “or paragraph 11A, as the case may be,” after “paragraph 11”, and | ||
(iii) by the insertion of the following paragraph after paragraph 13A: | ||
“13B. (1) Nothing in paragraph 13 shall prevent shares being appropriated to an individual under an approved scheme established by a relevant company (within the meaning of paragraph 1 of Schedule 12) and where, in a year of assessment, shares have been appropriated to an individual under such an approved scheme, paragraph 13 shall apply as if those shares had not been appropriated to that individual in that year of assessment. | ||
(2) Section 515 and paragraph 3(4) shall, subject to any necessary modification, apply in respect of all shares appropriated to that individual in that year of assessment.”, | ||
and | ||
(c) in Schedule 12— | ||
(i) in paragraph 1— | ||
(I) by the insertion in subparagraph (1) after the definition of “ordinary share capital” of the following: | ||
“‘relevant company’ means— | ||
(a) a company into which a trustee savings bank has been reorganised under section 57 of the Trustee Savings Banks Act, 1989 , or | ||
(b) ICC Bank plc;”, | ||
and | ||
(II) by the insertion of the following subparagraph after subparagraph (3): | ||
“(3A) For the purposes of this Schedule a company falls within the relevant company's group at a particular time if— | ||
(a) it is the relevant company, or | ||
(b) at that time, it is controlled by the relevant company and the trust concerned referred to in paragraph 2(1) is expressed to extend to it.”, | ||
(ii) by the insertion of the following paragraph after paragraph 7: | ||
“7A. Notwithstanding any other provision in this Schedule, in a case to which paragraph 11A applies, any reference in paragraph 8, 9 or 10 to an employee or a director of a company shall be construed as a reference to an individual who— | ||
(a) was an employee or a director, as the case may be, of the relevant company or of a company within the relevant company's group on the day the trust was established, and | ||
(b) is, at the relevant time (within the meaning, as may be appropriate in the circumstances, of paragraph 8, 9 or 10), an employee or a director, as the case may be, of a company referred to in paragraph 11A(3)(b).”, | ||
and | ||
(iii) by the insertion of the following paragraph after paragraph 11: | ||
“11A. (1) Notwithstanding any other provision of this Schedule, in any case where a trust is established by a company which is a relevant company, this Schedule shall, with any necessary modification, apply as respects the beneficiaries under the trust as if this paragraph were substituted for paragraph 11. | ||
(2) The trust deed shall contain provision as to the beneficiaries under the trust in accordance with this paragraph. | ||
(3) The trust deed shall provide that a person is a beneficiary at a particular time (in this subparagraph referred to as the ‘relevant time’) if— | ||
(a) the person was an employee or a director of the relevant company or of a company within the relevant company's group on the day the trust was established by that relevant company, | ||
(b) the person is at the relevant time an employee or a director of— | ||
(i) a company (in this subparagraph referred to as the ‘first-mentioned company’) which is, or was at any time since the day the trust was established, within the founding company's group, | ||
(ii) a company within a group of companies (within the meaning of paragraph 2(2)(b)) which has acquired control of the first-mentioned company, | ||
(iii) a company to which— | ||
(I) an employee, or | ||
(II) a director, | ||
referred to in clause (a) has been transferred under either or both the European Communities (Safe-guarding of Employees' Rights on Transfer of Undertaking) Regulations, 1980 and 2000 and the Central Bank Act, 1971 , or | ||
(iv) a company within a group of companies (within the meaning of paragraph 2(2)(b)), of which the company referred to in subclause (iii) is, or was at any time, a member, | ||
(c) at each given time in a qualifying period the person was such an employee or a director of a company referred to in clause (b), | ||
(d) in the case of a director, at that given time the person worked as a director of a company referred to in clause (b) or of a company within the relevant company's group at the rate of at least 20 hours a week (disregarding such matters as holidays and sickness), and | ||
(e) the person is chargeable to income tax in respect of his or her office or employment under Schedule E. | ||
(4) The trust deed may provide that a person is a beneficiary at a particular time if, but for subparagraph (3)(e), he or she would be a beneficiary within the rule which is included in the deed and conforms with subparagraph (3). | ||
(5) Subject to subparagraph (6), the trust deed may provide that a person is a beneficiary at a particular time (in this subparagraph referred to as the ‘relevant time’) if— | ||
(a) the person was an employee or a director of the relevant company or of a company within the relevant company's group on the day the trust was established by that relevant company, | ||
(b) the person has at each given time in a qualifying period been an employee or a director of a company referred to in subparagraph (3)(b) at that given time, | ||
(c) the person has ceased to be an employee or a director of a company referred to in subparagraph (3)(b), | ||
(d) at each given time in the 5 year period, or such lesser period as the Minister for Finance may by order prescribe, commencing on the date the trust was established, 50 per cent or such lesser percentage as the Minister for Finance may by order prescribe, of the securities retained by the trustees at that time were pledged by them as security for borrowings, and | ||
(e) at the relevant time a period of not more than 15 years has elapsed since the trust was established. | ||
(6) The trust deed may provide that a person is a beneficiary at a particular time (in this subparagraph referred to as the ‘relevant time’) if— | ||
(a) the person was an employee or a director of the relevant company or of a company within the relevant company's group on the day the trust was established by that relevant company, | ||
(b) the person has at each given time in a qualifying period been an employee or a director of a company referred to in subparagraph (3)(b) at that given time, | ||
(c) the person has ceased to be an employee or a director of a company referred to in subparagraph (3)(b), and | ||
(d) at the relevant time a period of not more than 18 months has elapsed since the person so ceased. | ||
(7) The trust deed shall not contain a rule that conforms with subparagraph (5) unless the rule is expressed as applying to every person within it. | ||
(8) The trust deed may provide for a person to be a beneficiary if the person is a charity and the circumstances are such that— | ||
(a) there is no person who is a beneficiary within the rule which is included in the deed and conforms with subparagraph (3) or with any rule which is so included and conforms with subparagraph (4), (5) or (6); and | ||
(b) the trust is in consequence of being wound up. | ||
(9) For the purposes of subparagraph (3), a qualifying period shall be a period— | ||
(a) whose length is not more than 3 years, | ||
(b) whose length is specified in the trust deed, and | ||
(c) which ends with the relevant time (within the meaning of that subparagraph). | ||
(10) For the purposes of subparagraphs (5) and (6), a qualifying period shall be a period— | ||
(a) whose length is equal to that of the period specified in the trust deed for the purposes of a rule which conforms with subparagraph (3), and | ||
(b) which ends when the person ceased as mentioned in subparagraph (5)(c) or (6)(c), as the case may be. | ||
(11) The trust deed shall not provide for a person to be a beneficiary unless the person is within the rule which is included in the deed and conforms with subparagraph (3) or any rule which is so included and conforms with subparagraph (4), (5), (6) or (8). | ||
(12) The trust deed shall provide that, notwithstanding any other rule which is included in it, a person cannot be a beneficiary at a particular time (in this subparagraph referred to as the ‘relevant time’) by virtue of a rule which conforms with subparagraph (3), (4), (5), (6) or (8) if— | ||
(a) at the relevant time the person has a material interest in a company referred to in subparagraph (3)(b), or | ||
(b) at any time in the period of one year preceding the relevant time the person has had a material interest in that company, | ||
and for the purposes of this subparagraph any reference to a company shall, in a case to which clause (a) of the definition of relevant company applies, also include a reference to a trustee savings bank which has been reorganised into the relevant company concerned. | ||
(13) For the purposes of satisfying the qualifying period requirement referred to in subparagraphs (3)(c), (5)(b) and (6)(b) a person shall also be regarded as such an employee or a director for any period in which that person is an employee or a director of, in a case to which clause (a) of the definition of relevant company applies, a trustee savings bank which has been reorganised into that relevant company. | ||
(14) For the purposes of this paragraph ‘charity’ means any body of persons or trust established for charitable purposes only. | ||
(15) Where an order is proposed to be made under subparagraph (5)(d), a draft of the order shall be laid before Dáil Éireann and the order shall not be made until a resolution approving of the draft has been passed by Dáil Éireann.”. | ||
(2) Subsection (1) shall apply and have effect as respects— | ||
(a) a profit sharing scheme, or | ||
(b) an employee share ownership trust, | ||
approved on or after 12 December 2000. |