Tax shall not be charged under section 65 above in respect of shares in or securities of a company which cease to be relevant property on becoming held on trusts of the description specified in section 86(1) below if the conditions in subsection (2) below are satisfied.
The conditions referred to in subsection (1) above are—
that 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;
that, at the date when the shares or securities cease to be relevant property or at a subsequent date not more than one year thereafter, both the conditions mentioned in subsection (2) of section 28 above (read with subsections (3) and (7)) are satisfied, without taking account of shares or securities held on other trusts; and
that the trusts do not permit any of the property to be applied at any time (whether during any such period as is referred to in section 86(1) below or later) for the benefit of any of the persons mentioned in subsection (4) of section 28 above (read with subsections (5) to (7)) or for the benefit of the settlor or of any person connected with him ; and
the shares in or securities of the company have been comprised in the settlement mentioned in section 65(1) throughout the period of two years ending with the date on which they cease to be relevant property.
In its application for the purposes of subsection (2)(c) above, section 28(4) and (6A) shall be construed as if—
references to section 28(1) were references to subsection (2) above, and
references to the time of the transfer of value were references to the time when the property ceases to be relevant property.
A reference in subsection (2)(d) to shares in or securities of a company includes, in a case in which a reorganisation of share capital has occurred, the original shares to which the new holding relates.
In subsection (4)—
"reorganisation of share capital" means a transaction to which section 127 of the 1992 Act (equation of original shares and new holding) applies or would apply but for section 134 of that Act;
"the original shares" and "the new holding" have the meaning given by section 126(1) of the 1992 Act.