A transfer of value by an individual who is beneficially entitled to shares in a company is exempt to the extent that (IHTA 1984, s. 28):

(1)the value transferred is attributable to shares in or securities of the company which become comprised in a settlement within the IHTA 1984, s. 86(1) (for the benefit of employees); and

(2)the persons for whose benefit the trusts permit the settled property to be applied include all or most of the persons employed by or holding office with the company.

The exemption is unlimited. It is subject to the conditions discussed below as regards the size of the trustees' shareholding, and the identity of the beneficiaries of the trust.

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