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