BIM44100 - Specific deductions - employee share schemes: Contributions to QUESTs, a/c periods starting before 1 Jan 2003 - qualifying purposes

The qualifying purposes for which a company's contribution must be expended are set out in FA89/S67 (4). They are:

• the acquisition of shares in the company which established the trust,
• the repayment of sums borrowed. Trustees may need to borrow sums to fund the purchase of shares or expenses. Such borrowings may be from the company or from other sources, particularly where the employee trust is being used to effect an employee buy-out and the shares in the company have to be acquired in a short time,
• the payment of interest on sums borrowed,
• the payment of any sum to a person who is a beneficiary under the terms of the trust deed,
• the meeting of expenses - the payment of Income Tax or Capital Gains Tax by the trustees can be accepted as the meeting of an expense for this purpose.