Corporation Tax Act 2009

995 Deduction for additional expense in providing partnership shares

(1) This section applies if—

(a) under an approved share incentive plan, partnership shares are awarded to employees because of their employment with a company (“the employing company”), and

(b) the market value of the shares when they were acquired by the trustees of the plan trust exceeds the partnership share money paid by the participants to acquire those shares.

(2) A deduction is allowed to the employing company for the period of account in which the shares are awarded.

(3) The amount of the deduction is an amount equal to the excess mentioned in subsection (1)(b).

(4) No deduction, other than one under this section, is allowed to the employing company or any associated company in relation to the provision of the shares.

(5) But subsection (4)—

(a) does not prevent a deduction being allowed under section 987 in relation to expenses incurred by a company in setting up a share incentive plan, and

(b) is subject to section 988.

(6) If the shares are awarded to the employees because of their employment with two or more companies, only one of those companies may make a deduction under this section in relation to the award.

(7) This section is subject to section 996.