Taxes Consolidation Act 1997 Schedule 12, paragraph 15

Permitted acquisitions of other securities

Paragraph 15 of Schedule 12 permits the trust deed of an approved profit sharing scheme to allow the trustees to acquire securities other than shares in the founding company in limited circumstances.

• The trustees of an approved profit sharing scheme normally hold shares in the founding company on behalf of participants.
• However, the trust deed may permit the trustees to acquire other securities if they arise from a reorganisation or reduction of share capital within the meaning of section 584.
• The trust deed may also permit the trustees to acquire other securities if they are issued in exchange for existing shares as part of a company amalgamation under section 586.
• These provisions ensure that corporate restructuring events do not force a breach of the trust deed or disqualify the scheme.