Income Tax (Earnings and Pensions) Act 2003 Schedule 5 paragraph 29

Meaning of "material interest"

Schedule 5 paragraph 29 defines what constitutes a "material interest" in a company for the purposes of the "no material interest" requirement in paragraph 28, setting the threshold at more than 30% of share capital or, for close companies, more than 30% of distributable assets.

• A material interest means owning or controlling more than 30% of a company's ordinary share capital, whether directly, through other companies, or by any indirect means
• For close companies, a material interest also arises where a person holds or is entitled to acquire rights to receive more than 30% of the assets available for distribution on a winding up or in other circumstances
• The definition of "close company" is extended to include companies that would be close but for being non-UK resident or being certain quoted companies
• Paragraph 30 provides supplementary rules dealing with options and interests held through Share Incentive Plans (SIPs)