Corporation Tax Act 2009 (c. 4)

Part 12 U.K. Other relief for employee share acquisitions

Modifications etc. (not altering text)

C1 Pt. 12 applied by 2010 c. 8, s. 425(5) (as inserted (with effect in accordance with Sch. 5 para. 25(1)-(3) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 5 para. 1 (with Sch. 5 paras. 27, 32-34))

Chapter 2 U.K. Relief if shares acquired by employee or other person

Calculation of amount of relief U.K.

1010 Calculation of relief if shares are neither restricted nor convertible U.K.

(1) If the shares acquired are neither restricted shares nor convertible shares, the amount of relief to be given is an amount equal to—

(a) the market value of the shares when they are acquired, less

(b) the total amount or value of any consideration given by any person in relation to the acquisition of the shares.

This is subject to section 1012 F1 ... .

(2) The consideration mentioned in subsection (1)(b) does not include the performance of any duties of, or in connection with, the relevant employment.

(3) A just and reasonable apportionment is to be made of any consideration given partly in relation to the acquisition of the shares and partly in relation to other matters.

Textual Amendments

F1 Words in s. 1010(1) omitted (with effect in accordance with s. 12(5)-(7) of the amending Act) by virtue of Finance Act 2017 (c. 10), s. 12(4)(c)

1011 Calculation of relief if shares are restricted or convertible U.K.

(1) If the shares acquired are restricted shares or convertible shares (or both), the amount of relief to be given is calculated as follows.

This is subject to section 1012.

(2) If the shares are restricted shares, the amount of relief is equal to the amount that, as a result of the acquisition of the shares, is [F2 relevant earnings of the employee] from the relevant employment.

(3) If the shares are convertible shares, the amount of relief is equal to the amount that, as a result of the acquisition of the shares, is [F3 relevant earnings of the employee] from the relevant employment.

In calculating the employee's earnings for this purpose the market value of the shares is to be determined as if they were not convertible shares.

[F4 (4) For the purposes of subsections (2) and (3) “relevant earnings” means—

(a) earnings within Chapter 1 of Part 3 of ITEPA 2003, and

(b) any amount that is treated as earnings by virtue of section 226A of that Act (employee shareholder shares) F5 ... ,

except that it does not include any amount of exempt income (within the meaning of section 8 of ITEPA 2003).]

(5) If the shares are both restricted and convertible, the total amount of relief is whichever is the greater of the amounts of relief given by subsections (2) and (3) (or, if the amount is the same in each case, that amount).

Textual Amendments

F2 Words in s. 1011(2) substituted (1.9.2013) by Finance Act 2013 (c. 29), Sch. 23 paras. 25(2), 38; S.I. 2013/1755, art. 2

F3 Words in s. 1011(3) substituted (1.9.2013) by Finance Act 2013 (c. 29), Sch. 23 paras. 25(2), 38; S.I. 2013/1755, art. 2

F4 S. 1011(4) substituted (1.9.2013) by Finance Act 2013 (c. 29), Sch. 23 paras. 25(3), 38; S.I. 2013/1755, art. 2

F5 Words in s. 1011(4)(b) omitted (with effect in accordance with s. 12(5)-(7) of the amending Act) by virtue of Finance Act 2017 (c. 10), s. 12(4)(d)

1012 Reduction in amount of relief U.K.

(1) This section applies if the relevant employment is in relation to both the qualifying business and a business (or part of a business) that is not within section 1007(2).

(2) The amount of relief is to be reduced by a just and reasonable amount.