Taxes Consolidation Act 1997 Schedule 12 paragraph 16

Transfer requirements and time limit

Paragraph 16 of Schedule 12 sets out the requirements governing how and when trustees of an employee share ownership trust must transfer securities to beneficiaries, including the qualifying terms that must be satisfied and the time limit for transfers.

• The trust deed must require the trustees to transfer securities to beneficiaries on qualifying terms within 20 years of the date the trustees acquired them.
• Qualifying terms require that securities are offered to all beneficiaries under the trust deed at the time of transfer and are transferred on similar terms to all who accept the offer.
• Variations in the terms of transfer based on levels of remuneration, length of service, or similar factors do not breach the requirement that the terms be similar.
• Where the order of transfer must be determined, securities acquired earlier by the trustees are treated as transferred before securities acquired later, on a first-in, first-out basis.