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Clause 39

Volume 116: debated on Tuesday 12 May 1987

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Close Companies: Meaning Of "Associate"

Question proposed, That the clause stand part of the Bill.

The purpose of the clause is to amend the definition of "associate" that is used when determining whether someone has a material interest in a close company, and as it applies in the case where a trust is involved. In practical terms, the proposed changes will affect two areas of tax only—the approved employee share scheme legislation and close company interest relief on loans taken out by employees to buy shares in their companies. The changes have been made principally in connection with the former Their effect is to relax the rules that determine eligibility to participate in an approved share scheme.

Question put and agreed to.

Clause 39 ordered to stand part of the Bill.