|
| |
|
(4) | This Chapter applies as if the employee had been a UK employee as mentioned |
| |
| |
(5) | The employee is a UK employee if— |
| |
(a) | the employee is UK resident and ordinarily UK resident, and |
| |
(b) | the duties of the relevant employment are performed in the United |
| 5 |
| |
| |
(a) | the original relief is available as a result of section 1015(3) (death of |
| |
| |
(b) | the recipient is not the employee, |
| 10 |
| this Chapter applies as if the recipient were alive and the restricted shares were |
| |
acquired by the recipient. |
| |
(7) | If the original relief is available as a result of section 1022 (takeover of company |
| |
whose shares are subject to an option), this Chapter applies as if the restricted |
| |
shares were acquired pursuant to the qualifying option mentioned in that |
| 15 |
| |
(8) | To find out what accounting period the relief is given for and how to calculate |
| |
the amount of relief, see— |
| |
(a) | section 1026 for relief available as a result of the occurrence of a |
| |
| 20 |
(b) | section 1027 for relief available as a result of the employee’s death. |
| |
| Those sections are supplemented by section 1028. |
| |
(9) | Section 1029 provides for the relief to be given to a successor company if the |
| |
qualifying business is transferred by group transfers. |
| |
1026 | Relief available on occurrence of chargeable event |
| 25 |
(1) | This section applies in relation to relief available as a result of the occurrence |
| |
| |
(2) | The relief is given for the accounting period in which the chargeable event |
| |
| |
(3) | The amount of relief is equal to the amount that counts as employment income |
| 30 |
of the employee under section 426 of ITEPA 2003 in relation to the chargeable |
| |
| |
(4) | For the purposes of subsection (3) the following are to be ignored— |
| |
(a) | any relief under section 428A of ITEPA 2003, |
| |
(b) | section 446E(6) of ITEPA 2003, and |
| 35 |
(c) | the amount of any non-commercial increase (as defined in section |
| |
446K(4) of ITEPA 2003) in the market value of the restricted shares after |
| |
| |
1027 | Relief available on death of employee |
| |
(1) | This section applies in relation to relief available as a result of the employee’s |
| 40 |
| |
(2) | The relief is given for the accounting period in which the employee dies. |
| |
|
| |
|
| |
|
(3) | The amount of relief is equal to the amount that would have counted as |
| |
employment income of the employee under section 426 of ITEPA 2003 had a |
| |
chargeable event within section 427(3)(c) of that Act occurred immediately |
| |
before Chapter 2 of Part 7 of that Act ceased to apply to the restricted shares |
| |
because of the employee’s death. |
| 5 |
(4) | For the purposes of subsection (3)— |
| |
(a) | the amount of expenses resulting from section 428(6) of ITEPA 2003 is |
| |
to be treated as nil, and |
| |
(b) | the following are to be ignored— |
| |
(i) | sections 428(9) and 446E(6) of ITEPA 2003, and |
| 10 |
(ii) | the amount of any non-commercial increase (as defined in |
| |
section 446K(4) of ITEPA 2003) in the market value of the |
| |
restricted shares after their acquisition. |
| |
1028 | Supplementary provision for purposes of sections 1026 and 1027 |
| |
(1) | If section 1012 or 1020 (reduction in amount of relief) applies in relation to the |
| 15 |
original relief, that section applies in relation to the relief under this Chapter as |
| |
it applies in relation to the original relief. |
| |
(2) | For the purposes of the giving of the relief under this Chapter— |
| |
(a) | if the original relief is available under Chapter 2, apply section 1013(2) |
| |
| 20 |
(b) | if the original relief is available under Chapter 3, apply section 1021(2) |
| |
| |
1029 | Transfer of qualifying business by group transfers |
| |
(1) | This section applies in relation to relief to be given under this Chapter if— |
| |
(a) | during the interim period (see subsections (5) to (7)), the whole, or |
| 25 |
substantially the whole, of the qualifying business is transferred, and |
| |
(b) | conditions A and B are met. |
| |
| |
(a) | the transfer is a group transfer, or |
| |
(b) | if there is more than one transfer, all the transfers are group transfers. |
| 30 |
(3) | Condition B is that, as a result of the transfer or transfers, at the end of the |
| |
| |
(a) | the whole, or substantially the whole, of the qualifying business is |
| |
carried on by one company (“the successor company”) only and that |
| |
company is not the employing company, or |
| 35 |
(b) | the whole, or substantially the whole, of the qualifying business is |
| |
carried on by companies (“the successor companies”) none of which is |
| |
| |
(4) | The relief is to be given to— |
| |
(a) | the successor company, or |
| 40 |
(b) | whichever one of the successor companies is nominated by them, |
| |
| instead of the employing company (and references to the employing company |
| |
in section 1013(3) and (4) or 1021(3) and (4) (as applied by section 1028(2)) are |
| |
to be read as references to the company to which the relief is to be given). |
| |
|
| |
|
| |
|
(5) | “The interim period” is to be read in accordance with subsections (6) and (7). |
| |
(6) | The interim period begins— |
| |
(a) | if the original relief is available under Chapter 2, when the restricted |
| |
| |
(b) | if the original relief is available under Chapter 3, when the option is |
| 5 |
| |
(7) | The interim period ends— |
| |
(a) | if the relief under this Chapter is available as a result of the occurrence |
| |
of a chargeable event, when the chargeable event occurs, and |
| |
(b) | if the relief under this Chapter is available as a result of the employee’s |
| 10 |
death, when the employee dies. |
| |
| |
Additional relief in cases involving convertible securities |
| |
1030 | Application of Chapter |
| |
(1) | This Chapter applies if relief under Chapter 2 or 3 is available in relation to an |
| 15 |
acquisition of convertible shares. |
| |
(2) | This Chapter also applies if— |
| |
(a) | there is an acquisition of convertible securities that are not shares, and |
| |
(b) | relief under Chapter 2 or 3 would have been available in relation to the |
| |
acquisition but for the fact that the securities were not shares in relation |
| 20 |
to which all the conditions set out in section 1008 or 1016 were met. |
| |
(3) | For the purposes of subsections (1) and (2)(b) it does not matter if the amount |
| |
of relief is calculated or would have been calculated as nil. |
| |
| |
“the acquired securities” means the convertible shares mentioned in |
| 25 |
subsection (1) or the convertible securities mentioned in subsection (2), |
| |
“convertible securities” includes an interest in convertible securities, and |
| |
“the original relief” means the relief mentioned in subsection (1) or (2)(b). |
| |
(5) | If the original relief is or would have been available as a result of section 1015(3) |
| |
(death of recipient), this Chapter applies as if the recipient were alive and the |
| 30 |
acquired securities were acquired by the recipient. |
| |
(6) | If the original relief is or would have been available as a result of section 1022 |
| |
(takeover of company whose shares are subject to an option), this Chapter |
| |
applies as if the acquired securities were acquired pursuant to the qualifying |
| |
option mentioned in that section. |
| 35 |
1031 | Additional relief available if shares acquired are convertible shares etc |
| |
(1) | Relief under this Chapter is available to the employing company if, after the |
| |
acquisition of the acquired securities, a chargeable event (see section 1032) |
| |
occurs in relation to those securities. |
| |
(2) | Relief under this Chapter is also available to the employing company if the |
| 40 |
| |
|
| |
|
| |
|
(a) | is dead when that acquisition occurs, or |
| |
(b) | dies after that acquisition. |
| |
(3) | But relief resulting from subsection (2) does not become available until the |
| |
occurrence of the first event (referred to in this Chapter as “the relief event”) |
| |
occurring after the employee’s death that would have been a chargeable event |
| 5 |
in relation to the acquired securities had the employee been alive. |
| |
(4) | To find out what accounting period the relief is given for and how to calculate |
| |
the amount of relief, see— |
| |
(a) | section 1033 for relief available as a result of the occurrence of a |
| |
| 10 |
(b) | section 1034 for relief available as a result of the employee’s death. |
| |
| Those sections are supplemented by section 1035. |
| |
(5) | Section 1036 provides for the relief to be given to a successor company if the |
| |
qualifying business is transferred by group transfers. |
| |
1032 | Meaning of “chargeable event” |
| 15 |
(1) | In this Chapter “chargeable event” means an event that— |
| |
(a) | is a chargeable event for the purposes of section 438 of ITEPA 2003, |
| |
(b) | is within section 439(3)(a) of ITEPA 2003, and |
| |
(c) | is within subsection (2). |
| |
(2) | An event is within this subsection if it is the conversion of convertible securities |
| 20 |
into shares in relation to which— |
| |
(a) | if the original relief is or would have been available under Chapter 2, |
| |
all the conditions set out in section 1008 are met, or |
| |
(b) | if the original relief is or would have been available under Chapter 3, |
| |
all the conditions set out in section 1016 are met (ignoring paragraph (f) |
| 25 |
| |
(3) | Subsection (4) applies if section 438 of ITEPA 2003— |
| |
(a) | does not apply in relation to the acquired securities, but |
| |
(b) | would apply if at all material times the employee had been a UK |
| |
| 30 |
(4) | This Chapter applies as if the employee had been a UK employee as mentioned |
| |
| |
(5) | The employee is a UK employee if— |
| |
(a) | the employee is UK resident and ordinarily UK resident, and |
| |
(b) | the duties of the relevant employment are performed in the United |
| 35 |
| |
1033 | Relief available on occurrence of chargeable event |
| |
(1) | This section applies in relation to relief available as a result of the occurrence |
| |
| |
(2) | The relief is given for the accounting period in which the chargeable event |
| 40 |
| |
|
| |
|
| |
|
(3) | The amount of relief is equal to the amount that counts as employment income |
| |
of the employee under section 438 of ITEPA 2003 in relation to the chargeable |
| |
| |
(4) | For the purposes of subsection (3) the following are to be ignored— |
| |
(a) | any relief under section 442A of ITEPA 2003, and |
| 5 |
(b) | sections 446G and 446H of ITEPA 2003. |
| |
1034 | Relief available following death of employee |
| |
(1) | This section applies in relation to relief available as a result of the employee’s |
| |
| |
(2) | The relief is given for the accounting period in which the relief event occurs. |
| 10 |
(3) | The amount of relief is equal to the amount that would have counted as |
| |
employment income of the employee under section 438 of ITEPA 2003 in |
| |
relation to the relief event had the employee been alive. |
| |
(4) | For the purposes of subsection (3) sections 446G and 446H of ITEPA 2003 are |
| |
| 15 |
1035 | Supplementary provision for purposes of sections 1033 and 1034 |
| |
(1) | If section 1012 or 1020 (reduction in amount of relief) applies or would have |
| |
applied in relation to the original relief, that section applies in relation to the |
| |
relief under this Chapter as it applies or would have applied in relation to the |
| |
| 20 |
(2) | For the purposes of the giving of the relief under this Chapter— |
| |
(a) | if the original relief is or would have been available under Chapter 2, |
| |
apply section 1013(2) to (5), and |
| |
(b) | if the original relief is or would have been available under Chapter 3, |
| |
apply section 1021(2) to (5). |
| 25 |
1036 | Transfer of qualifying business by group transfers |
| |
(1) | This section applies in relation to relief to be given under this Chapter if— |
| |
(a) | during the interim period (see subsections (5) to (7)), the whole, or |
| |
substantially the whole, of the qualifying business is transferred, and |
| |
(b) | conditions A and B are met. |
| 30 |
| |
(a) | the transfer is a group transfer, or |
| |
(b) | if there is more than one transfer, all the transfers are group transfers. |
| |
(3) | Condition B is that, as a result of the transfer or transfers, at the end of the |
| |
| 35 |
(a) | the whole, or substantially the whole, of the qualifying business is |
| |
carried on by one company (“the successor company”) only and that |
| |
company is not the employing company, or |
| |
(b) | the whole, or substantially the whole, of the qualifying business is |
| |
carried on by companies (“the successor companies”) none of which is |
| 40 |
| |
(4) | The relief is to be given to— |
| |
|
| |
|
| |
|
(a) | the successor company, or |
| |
(b) | whichever one of the successor companies is nominated by them, |
| |
| instead of the employing company (and references to the employing company |
| |
in section 1013(3) and (4) or 1021(3) and (4) (as applied by section 1035(2)) are |
| |
to be read as references to the company to which the relief is to be given). |
| 5 |
(5) | “The interim period” is to be read in accordance with subsections (6) and (7). |
| |
(6) | The interim period begins— |
| |
(a) | if the original relief is or would have been available under Chapter 2, |
| |
when the acquired securities are acquired, and |
| |
(b) | if the original relief is or would have been available under Chapter 3, |
| 10 |
when the option is obtained. |
| |
(7) | The interim period ends— |
| |
(a) | if the relief under this Chapter is available as a result of the occurrence |
| |
of a chargeable event, when the chargeable event occurs, and |
| |
(b) | if the relief under this Chapter is available as a result of the employee’s |
| 15 |
death, when the relief event occurs. |
| |
| |
Relationship between relief under this Part and other reliefs |
| |
1037 | Priority of Chapter 1 of Part 11 |
| |
(1) | Deductions available under Chapter 1 of Part 11 (relief for particular employee |
| 20 |
share acquisition schemes: share incentive plans) are to be given priority over |
| |
| |
(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. |
| |
1038 | Exclusion of other deductions |
| 25 |
(1) | If relief under this Part is or, apart from condition 2 in section 1009(1), would |
| |
be available for an accounting period, no other deduction in relation to |
| |
expenses within subsection (2) is allowed for the purpose of calculating any |
| |
company’s profits for corporation tax purposes for any accounting period. |
| |
(2) | The expenses within this subsection are the expenses directly related to the |
| 30 |
| |
(3) | They include, in a case in which the shares are acquired under an employee |
| |
share scheme, any amount paid or payable by the employing company in |
| |
relation to the participation of the employee in the scheme. |
| |
(4) | But they do not include in such a case— |
| 35 |
(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 |
| 40 |
incidental expenses of acquiring the shares. |
| |
|
| |
|
| |
|
(5) | “Employee share scheme” means a scheme or arrangement for enabling shares |
| |
to be acquired because of persons’ employment. |
| |
| |
Additional relief for expenditure on research and development |
| |
| 5 |
| |
| |
| |
(1) | This Part provides for corporation tax relief for expenditure on research and |
| |
| 10 |
(2) | Relief under this Part is in addition to any deduction given under section 87 for |
| |
| |
(3) | Relief under Chapters 2 to 4 is available to a company which is a small or |
| |
medium-sized enterprise, in particular— |
| |
(a) | Chapter 2 provides for relief where the cost of in-house direct research |
| 15 |
and development or contracted out research and development is |
| |
| |
(b) | Chapter 3 provides for relief where research and development is |
| |
contracted out to the company, and |
| |
(c) | Chapter 4 provides for relief for research and development expenditure |
| 20 |
which is subsidised or in respect of which the company is prevented |
| |
from obtaining relief under Chapter 2 by the cap on aid imposed by |
| |
| |
(4) | Relief under Chapter 5 is available to large companies (and insurance |
| |
companies treated as large companies). |
| 25 |
(5) | Chapter 6 contains further provision in relation to relief under Chapters 2 to 5, |
| |
| |
(a) | section 1081 provides for certain insurance companies to be treated as |
| |
| |
(b) | section 1082 contains provision about expenditure of group companies, |
| 30 |
(c) | section 1083 contains provision in relation to refunds of certain |
| |
expenditure on which relief has been obtained (treating part of those |
| |
refunds as income chargeable to tax), and |
| |
(d) | section 1084 contains an anti-avoidance provision dealing with |
| |
artificially inflated claims for relief or R&D tax credits (as to which, see |
| 35 |
| |
(6) | Relief under Chapter 7 is available to companies (whether they are small or |
| |
medium-sized enterprises or large companies) where expenditure is incurred |
| |
on vaccine or medicine research. |
| |
(7) | Chapters 2 and 7 also provide for the payment of tax credits (“R&D tax |
| 40 |
credits”) where a company which is a small or medium-sized enterprise— |
| |
(a) | obtains relief under Chapter 2 or 7, and |
| |
|
| |
|