(1) For the purposes of the benefits code a person has a material interest in a company if condition A or B is met.

(2) Condition A is that the person (with or without one or more associates) or any associate of that person (with or without one or more such associates) is—

(a) the beneficial owner of, or

(b) able to control, directly or through the medium of other companies or by any other indirect means,

more than 5% of the ordinary share capital of the company.

(3) Condition B is that, in the case of a close company, the person (with or without one or more associates) or any associate of that person (with or without one or more such associates), possesses or is entitled to acquire, such rights as would—

(a) in the event of the winding-up of the company, or

(b) in any other circumstances,

give an entitlement to receive more than 5% of the assets which would then be available for distribution among the participators.

(4) In this section—

“associate” has the meaning given by section 417(3) of ICTA except that, for this purpose,

“relative” in section 417(3) has the meaning given by subsection (5) below, and

“participator” has the meaning given by section 417(1) of ICTA.

(5) For the purposes of this section a person (“A”) is a relative of another (“B”) if A is—

(a) B's spouse [or civil partner]¹,

(b) a parent, child or remoter relation in the direct line either of B or of B's spouse [or civil partner]¹,

(c) a brother or sister of B or of B's spouse [or civil partner]¹, or

(d) the spouse [or civil partner]¹ of a person falling within paragraph (b) or (c).