Taxation of Chargeable Gains Act 1992 section 236U

Interpretation of sections 236H to 236U

Section 236U provides the definitions and interpretive rules that apply throughout the employee ownership trust disposal provisions in sections 236H to 236T.

• Key terms — "company", "ordinary share capital" and "trade" — are given specific definitions for the purposes of the employee ownership trust rules, with "trade" requiring the activity to be conducted commercially with a view to making profits.
• References to a group of companies, group membership and the principal company of a group follow the standard capital gains tax grouping rules, with necessary modifications where a company is incorporated outside the United Kingdom.
• The "connected persons" test is widened beyond the standard definition to also include uncles, aunts, nephews and nieces as relatives.
• These definitions and interpretive rules have applied to disposals made on or after 6 April 2014, when the employee ownership trust provisions were introduced by Finance Act 2014.