D1.335 What relief is available to a company awarding shares to employees?
Relief is available to a company by way of deduction in computing its corporation tax profits in respect of an award of shares (or the grant of an option to acquire shares) by virtue of a person's employment with that company (the employing company). The shares or option may be acquired by a person by virtue of his own or another person's employment1.
In general, the deduction is equal to the market value of the shares at the time of the award, less the amount of consideration provided by the recipient or another person in respect of the shares, where the necessary qualifying conditions have been met.
Consideration for this purpose does not include the performance of employment duties2 or (prior to 1 December 2016) any £2,000 payment deemed to have been made3 by an employee shareholder on or after 1 September 20134; see E4.591–E4.593.
The 1 December 2016 date mentioned above is 2 December 2016 if the individual entering into the employee shareholder agreement received the relevant investment advice before 1.30 pm on 23 November 20165.
Deduction under these provisions is not available if a deduction can be claimed in respect of shares issued under a share incentive plan (see D1.333)6.
Where relief is available under these provisions for an accounting period (or would be available but for the denial of relief where ITEPA 2003, s 446UA is in point; see E4.507W),