Inheritance Tax Act 1984 section 75A

Property becoming subject to employee-ownership trust

Section 75A provides an inheritance tax exemption when shares or securities of a company move out of a discretionary trust and into an employee-ownership trust, provided certain conditions about the company's trading status, the trust's benefit structure, and the trust's controlling interest are met.

• No inheritance tax exit charge arises when shares or securities leave a discretionary trust and become held on employee benefit trusts, provided the specified conditions are satisfied
• The company whose shares are transferred must meet a trading requirement, and the employee-ownership trust must satisfy an all-employee benefit requirement
• The trust must not already hold a controlling interest in the company at the start of the tax year in which the transfer occurs, but must have acquired one by the end of that tax year
• Whether the trading, all-employee benefit, and controlling interest requirements are met is determined by reference to specific provisions of the Taxation of Chargeable Gains Act 1992