Income Tax (Earnings and Pensions) Act 2003 section Schedule 2 paragraph 24

Meaning of "associate": trustees of discretionary trust

Schedule 2 paragraph 24 explains when the trustees of a discretionary trust are treated as "associates" of a person for the purposes of Share Incentive Plans (SIPs).

• Trustees of a discretionary trust are treated as associates of a person if that person, or a relative of that person, is a beneficiary or potential beneficiary of the trust.
• A "discretionary trust" means any trust where the income or capital may be distributed at the discretion of the trustees or another person, rather than being fixed by the terms of the trust.
• A "relative" for this purpose means a spouse or civil partner, parent, child, brother or sister, or the spouse or civil partner of any of those relations.
• This rule is relevant when determining whether a person has a material interest in a company, since the shares or rights held by associates are aggregated with those of the individual.