Income Tax (Earnings and Pensions) Act 2003 Schedule 4 paragraph 10

Meaning of "material interest"

Schedule 4 paragraph 10 defines what constitutes a "material interest" in a company for the purposes of the "no material interest" requirement in paragraph 9, which is one of the conditions for a tax-advantaged Share Incentive Plan.

• A material interest in a company means either a material interest in its share capital or a material interest in its assets
• A material interest in share capital means beneficially owning, or being able to control (directly or indirectly), more than 30% of the ordinary share capital
• A material interest in assets means possessing or being entitled to acquire rights that would, on a winding up or in other circumstances, give entitlement to more than 30% of the assets available for distribution among participators
• The definition of "participator" follows the Corporation Tax Act 2010, and further rules about options and related matters are set out in paragraph 11