Corporation Tax Act 2010 section 445

Section 444: registered pension schemes

Section 445 explains how shares held on trust for a registered pension scheme are treated for the purposes of determining whether a company is close, and sets out the exception where the pension scheme mainly benefits directors or employees of certain connected companies.

• Where shares in a company are held on trust for a registered pension scheme, the trustees are treated as beneficial owners and as a non-close company for the purposes of the close company tests in section 444.
• This favourable treatment does not apply if the pension scheme exists wholly or mainly for the benefit of current or past directors or employees of certain connected companies, or their dependants.
• The connected companies include the company itself, its associated companies, companies controlled by its directors or their associates, and any close company.
• The practical effect is that a large, broadly based pension scheme holding shares will not cause a company to be treated as close, but a scheme set up mainly for the benefit of directors or employees of connected companies will not receive this treatment.