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Paragraph 31, Schedule 5 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA)

For the purposes of the material interest tests, associate means:

• relatives of the employee, that is a spouse or civil partner, parent, grandparent, child, grandchild or remoter relative in the direct line. However, for the purposes of EMI it does not include siblings,
• any partner of the employee,
• the trustees of any settlement in relation to which the employee or any relative is or was a settlor,
• if the company has shares in trust, the trustees of any settlement where the employee has an interest, or
• the personal representatives of a deceased person, where company shares are part of the estate and the employee has an interest in the estate.

Settlement here means a trust. Settlor means the person who provided funds for the trust, (section 20 ITTOIA 2005).

For EMI, associate does not include the trustees of:

• Schedule 2 SIPs, or
• employee benefit trusts and discretionary trusts, in certain circumstances.

»Ê¹ÚÌåÓýapp trustees of an employee benefit trust (EBT) are not treated as associates unless the employee, together with his associates except for the trustees of the EBT, has had a material interest in the company at any time since 13 March 1989. This applies if the EBT is a qualifying EBT in accordance with section 550 ITEPA.