Taxes Consolidation Act 1997 Schedule 11 paragraph 14

Individual with material interest

Paragraph 14 of Schedule 11 prevents an individual who has a material interest in a close company from receiving an appropriation of shares under an approved profit sharing scheme.

• An individual cannot have shares appropriated if he or she has, or had within the preceding 12 months, a material interest in the close company whose shares are being appropriated, or in a company that controls or is a consortium member of that company.
• "Close company" is broadly defined and includes non-resident companies and quoted companies that would otherwise be treated as close (for example, where principal members hold more than 85% of voting power).
• A person has a material interest if he or she, alone or together with associates, can control 15% or more of the company's ordinary share capital — a higher threshold than the standard 5% used elsewhere.
• Associates include relatives, partners, trustees of settlements, and persons interested in the same trust shares, but exclude beneficiaries of Revenue-approved employee pension schemes unless they own 15% or more of the ordinary share capital.

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