188体育

TCGA92/S236N(1)-(4) and FA14/Sch 37, Para 3(b)

The 鈥榣imited participation requirement鈥� is met if both of the conditions below are fulfilled.

• There was no time in the period of 12 months ending immediately after the disposal when P was a participator in C and the 鈥榩articipator fraction鈥� exceeded two-fifths.
• The 鈥榩articipator fraction鈥� does not exceed two-fifths at any time in the period beginning with the disposal and ending at the end of the tax year in which it occurs.

Where the transitional rules apply, that is in determining relief on disposals on or after 6 April 2014 and before 26 June 2014, the second condition does not have to be met.

For the purposes of the above conditions, a time that falls in a period during which the 鈥榩articipator fraction鈥� exceeded two-fifths is to be disregarded if

• that period lasts no more than 6 months and
• the fraction exceeded two-fifths during that period by reason of events outside the reasonable control of the trustees.

Where聽the trust does not yet exist, we would not consider where the fraction exceeded two-fifths to be an聽event that is within the reasonable control of the trustees.

For the meaning of 鈥榩articipator fraction鈥� see CG67856.

The purpose of this requirement is to guard against relief being given to individuals who had a substantial shareholding in the company in circumstances where they, along with other claimants, made up a significant proportion of the business鈥檚 workforce before and after the creation of the EOT.