Corporation Tax Act 2009

Chapter 6 U.K. Relationship between relief under this Part and other reliefs [F1 ETC]

Textual Amendments

F1 Word in Pt. 12 Ch. 6 heading inserted (1.9.2013) by Finance Act 2013 (c. 29), Sch. 23 paras. 33(2), 38; S.I. 2013/1755, art. 2

1037 Priority of Chapter 1 of Part 11 U.K.

(1) Deductions available under Chapter 1 of Part 11 (relief for particular employee share acquisition schemes: share incentive plans) are to be given priority over relief under this Part.

(2) No relief is available under this Part in relation to shares in respect of which a deduction is allowable, or has been made, under that Chapter.

[F2 1038 Exclusion of other deductions U.K.

(1) Subsection (2) applies if relief is or, apart from condition 2 in section 1009(1), would be available under this Part.

For this purpose, it does not matter if the amount of the relief is or would be calculated as nil.

(2) Except as provided for by this Part, for the purpose of calculating any company's profits for corporation tax purposes for any accounting period, no deduction is allowed—

(a) in relation to the provision of the shares or to any matter connected with the provision of the shares, or

(b) so far as not covered by paragraph (a) in a case in which the shares are acquired pursuant to an option, in relation to the option or to any matter connected with the option.

(3) In a case in which section 1022 has applied, in subsection (2)(b) references to the option cover the new option and any relevant earlier qualifying option.

(4) For the purposes of subsection (2) it does not matter if the accounting period in question falls wholly before or after the time at which the shares are acquired.

(5) In a case in which the shares are acquired under an employee share scheme, the deductions disallowed by subsection (2) include (in particular) deductions for amounts paid or payable by the employing company in relation to the participation of the employee in the scheme.

(6) But subsection (2) does not disallow deductions for—

(a) expenses incurred in setting up the scheme,

(b) expenses incurred in meeting, or contributing to, the costs of administering the scheme,

(c) the costs of borrowing for the purposes of the scheme, or

(d) fees, commission, stamp duty, stamp duty reserve tax, and similar incidental expenses of acquiring the shares.

(7) “Employee share scheme” means a scheme or arrangement for enabling shares to be acquired because of persons' employment.

(8) In a case in which relief is or, apart from condition 2 in section 1009(1), would be available under Chapter 5 by virtue of section 1030(2), subsection (2) does not disallow deductions in relation to the provision of the convertible securities.]

Textual Amendments

F2 S. 1038 substituted (with effect in accordance with s. 40(4)-(6) of the amending Act) by Finance Act 2013 (c. 29), s. 40(2)

[F3 1038A Exclusion of deductions for share options: shares not acquired U.K.

(1) Subsection (2) applies if—

(a) a person obtains an option to acquire shares and the requirements of section 1015(1)(a) to (c) are met in relation to the obtaining of the option, or

(b) so far as not covered by paragraph (a), a person obtains an option to acquire shares and the obtaining of the option is connected with an option previously obtained in a case covered by paragraph (a) or this paragraph.

(2) For the purpose of calculating any company's profits for corporation tax purposes for any accounting period, no deduction is allowed in relation to—

(a) the option, or

(b) any matter connected with the option,

unless the shares are acquired pursuant to the option.

(3) For the purposes of subsection (2) it does not matter if the accounting period in question falls wholly before or after the time at which the option is obtained.

(4) In a case in which the shares would be acquired under an employee share scheme, the deductions disallowed by subsection (2) include (in particular) deductions for amounts paid or payable by the employing company in relation to the participation of the employee in the scheme.

(5) But subsection (2) does not disallow deductions for—

(a) expenses incurred in setting up the scheme,

(b) expenses incurred in meeting, or contributing to, the costs of administering the scheme,

(c) the costs of borrowing for the purposes of the scheme, or

(d) fees, commission, stamp duty, stamp duty reserve tax, and similar incidental expenses of acquiring the shares.

(6) “Employee share scheme” means a scheme or arrangement for enabling shares to be acquired because of persons' employment.

(7) Subsection (2) does not disallow deductions for—

(a) amounts on which the employee is subject to a charge under ITEPA 2003,

(b) amounts on which the employee would have been subject to a charge under ITEPA 2003 had the employee been a UK employee at all material times, or

(c) if the employee has died, amounts on which the employee would have been subject to a charge under ITEPA 2003 had the employee been alive.

(8) “UK employee” is to be read in accordance with section 1017(4).]

Textual Amendments

F3 S. 1038A inserted (with effect in accordance with s. 40(4)(7)(8) of the amending Act) by Finance Act 2013 (c. 29), s. 40(3)

[F4 1038B Employee shareholder shares U.K.

For the purposes of this Part, any payment treated as made under section 226B of ITEPA 2003 (employee treated as paying £2000 for employee shareholder shares) in respect of the acquisition of shares is to be ignored when determining—

(a) whether a person is subject to a charge to tax under that Act,

(b) the amount that counts (or would have counted) as employment income under that Act, or

(c) the consideration given by a person in relation to the acquisition of the shares.]

Textual Amendments

F4 S. 1038B inserted (1.9.2013) by Finance Act 2013 (c. 29), Sch. 23 paras. 33(1), 38; S.I. 2013/1755, art. 2