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YC 8: Death of share or option holder
or “What happens to shares or options when the owner dies”
You could also call this:

“Rules for trustees holding company shares or options”

When trustees of a trust hold shares or options in a company, you treat them as if they were one person. This person isn’t a company and is separate from the trustees when they’re doing other things.

This rule doesn’t apply if setting up the trust, ending it, or changing its trustees is done to avoid following the continuity rules.

If a company that’s a trustee (but not Public Trust or some related companies) holds shares or options in another company, and then sells or gives out its own shares or options, it’s treated like it sold and bought back the first company’s shares or options. This happens if the sale or giving out changes who really owns the first company’s shares or options.

A company acting as a trustee is included in this rule.

If trust beneficiaries change, it might be treated as if the shares or options were sold at that time. You can find more about this in Section GB 5.

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Next up: YC 10: Shareholders holding less than 10% direct interests

or “Rules for shareholders with very small ownership in a company”
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Part Y Definitions and related matters
Measurement of company ownership

YC 9Shares or options held by trustees

  1. All the trustees of a trust holding a share or an option over a share in a company under the trust are treated as the same notional single person that is—

  2. not a company; and
    1. separate and distinct from the trustees in their capacities other than as trustees of the trust.

      1. Subsection (1) does not apply if any of the following has a purpose or effect of defeating the intent and application of a continuity provision:

      2. the establishment of the trust:
        1. the termination of the trust:
          1. a change in the trustees of the trust.

            1. Subsection (4) applies if—

            2. any share in a company (the first company) or option over a share in the first company is held by a trustee; and
              1. the trustee is a company other than—
                1. Public Trust:
                  1. any company in which Public Trust holds all voting and market value interests:
                    1. a statutory trustee company; and
                    2. any share in the trustee or option over a share in the trustee is disposed of, issued, or granted; and
                      1. to the extent to which the disposal, issue, or grant changes the beneficial ownership of the share or option over a share in the first company, unless it can be shown not to have a purpose or effect of defeating the intent and application of any of the continuity provisions.

                        1. A reference to company in subsection (3)(b) includes a company that is acting in the capacity of trustee.

                        2. The trustee is treated as having disposed of the share or option in the first company, at the time of the disposal, issue, or grant, to an unrelated person and having immediately reacquired the share or option.

                        3. Section GB 5 (Arrangements involving trust beneficiaries) may apply to treat a share or option held by a trustee as being disposed of at the time of a change in trust beneficiaries.

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                        Notes
                        • Section YC 9(3B) heading: inserted, on , by section 258 of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
                        • Section YC 9(3B): inserted, on , by section 258 of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).