Part 4: Relocation of section 84A of ICTA
Overview
1303.This Part inserts section 94A of ITTOIA and amends section 272 of that Act. Section 94A is based on section 84A of ICTA.
1304.Section 84A of ICTA (costs of establishing share option or profit sharing schemes) is rewritten for corporation tax purposes in section 999 of CTA 2009. It remains in force for income tax purposes as amended by Schedule 1 to CTA 2009.
1305.Section 84A(5) of ICTA is repealed without replacement as it is a spent commencement provision.
Section 94A of ITTOIA: Costs of setting up SAYE option scheme or CSOP scheme
1306.Section 94A allows a company a deduction for the costs of setting up an approved “save as you earn” (SAYE) option scheme or an approved “company share option plan” (CSOP) scheme. The deduction is allowed in calculating for income tax purposes the profits of a trade carried on by the company and, by virtue of section 272 of ITTOIA, of a property business carried on by it.
1307.Only a company may establish an SAYE option scheme or a CSOP scheme. In most cases the profits of the trade or property business carried on by the establishing company will be within the charge to corporation tax and section 999 of CTA 2009 will apply. But a scheme may be established by a non‑UK resident company. The profits of a trade or property business carried on by such a company may be within the charge to income tax.
Section 272 of ITTOIA: Profits of a property business: application of trading income rules
1308.The amendment of section 272(2) to include reference to section 94A ensures that the deduction which was available under section 84A of ICTA (as applied by section 272(1) of ITTOIA) when calculating the profits of a property business is instead available under section 94A of ITTOIA (as applied by section 272(1) and (2) of that Act).