CX 35 Meaning of employee share loan
Meaning

(1)

Employee share loan means a loan made to an employee if—

(a)

the loan is made for the sole purpose of enabling the employee to acquire, under a scheme of acquisition,—

(i)

shares, rights, or options in the company that is their employer:

(ii)

shares, rights, or options in a company that is associated with their employer; and

(b)

the employee uses the loan only for the purpose of the acquisition; and

(c)

the employee beneficially owns the shares, rights, or options throughout the term of the loan; and

(d)

the employee must immediately repay the loan in full if they stop being the beneficial owner of any of the shares, rights, or options; and

(e)

the company issuing the shares, rights, or options must maintain a dividend-paying policy throughout the term of the loan.

Exclusions

(2)

This section does not apply—

(a)

to shares, rights, or options in a qualifying company:

(b)

to a loan made under a share purchase scheme:

(c)

to an employer and an employee who are associated persons.

Defined in this Act: associated person, company, dividend, employee, employee share loan, employer, pay, qualifying company, share

Compare: 2004 No 35 s CX 29