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Section 672: Residual interest under pension scheme or employees' share scheme

Companies Act 2006 · 2006 c. 46View on legislation.gov.uk

Part 18: Acquisition by limited company of its own shares — Chapter 1: General provisions

Where the shares are held on trust for the purposes of a pension scheme or employees' share scheme, there shall be disregarded any residual interest of the company that has not vested in possession.

A "residual interest" means a right of the company to receive any of the trust property in the event of—

all the liabilities arising under the scheme having been satisfied or provided for, or
the company ceasing to participate in the scheme, or
the trust property at any time exceeding what is necessary for satisfying the liabilities arising or expected to arise under the scheme.

In subsection (2)—

the reference to a right includes a right dependent on the exercise of a discretion vested by the scheme in the trustee or another person, and
the reference to liabilities arising under a scheme includes liabilities that have resulted, or may result, from the exercise of any such discretion.

For the purposes of this section a residual interest vests in possession—

in a case within subsection (2)(a), on the occurrence of the event mentioned there (whether or not the amount of the property receivable pursuant to the right is ascertained);
in a case within subsection (2)(b) or (c), when the company becomes entitled to require the trustee to transfer to it any of the property receivable pursuant to that right.

Where by virtue of this section shares are exempt from section 660 or 661 (shares held by company's nominee) at the time they are taken, issued or acquired but the residual interest in question vests in possession before they are disposed of or fully paid up, those sections apply to the shares as if they had been taken, issued or acquired on the date on which that interest vests in possession.

Where by virtue of this section shares are exempt from sections 662 to 668 (shares held by or for public company) at the time they are acquired but the residual interest in question vests in possession before they are disposed of, those sections apply to the shares as if they had been acquired on the date on which the interest vests in possession.

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This legislation text comes from legislation.gov.uk. Contains public sector information licensed under the Open Government Licence v3.0. These source and reuse terms cover the legislation text, not Remedy's commentary.

Reuse reviewed 21 August 2026 under Open Government Licence v3.0.