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Contents

Official guidance
Business Income Manual

BIM44000 · Specific deductions: employee share schemes

  • BIM44001 · Glossary
  • BIM44002 · Introduction
  • BIM44005 · Types of schemes
  • BIM44010 · Approved schemes
  • BIM44015 · Summary of tax and NICs treatment
  • BIM44020 · Costs of setting up schemes
  • BIM44025 · Incidental costs of running schemes
  • BIM44247 · Costs of providing shares to employees: introduction
  • BIM44250 · Providing shares to employees: overview
  • BIM44251 · Providing shares to employees: Share Incentive Plans: introduction
  • BIM44253 · Providing shares to employees: Share Incentive Plans: general rules
  • BIM44255 · Providing shares to employees: Share Incentive Plans: general rules: special rules for trusts acquiring 10% of ordinary share capital
  • BIM44260 · Providing shares to employees: qualifying shares
  • BIM44265 · Providing shares to employees: qualifying shares: introduction
  • BIM44270 · Providing shares to employees: qualifying shares: requirements for relief
  • BIM44275 · Providing shares to employees: qualifying shares: how the relief is given
  • BIM44280 · Providing shares to employees: qualifying shares: overview of the legislation
  • BIM44285 · Providing shares to employees: qualifying shares: meaning of qualifying shares
  • BIM44290 · Providing shares to employees: qualifying shares: kind of shares acquired
  • BIM44295 · Providing shares to employees: qualifying shares: company whose shares are acquired
  • BIM44300 · Providing shares to employees: qualifying shares: which company gets the deduction
  • BIM44305 · Providing shares to employees: qualifying shares: the relevant business requirements
  • BIM44307 · Providing shares to employees: qualifying shares: host employer
  • BIM44310 · Providing shares to employees: qualifying shares: when the deduction is given
  • BIM44315 · Providing shares to employees: qualifying shares: amount of deduction for acquisition periods
  • BIM44320 · Providing shares to employees: qualifying shares: Income Tax position of employee
  • BIM44325 · Providing shares to employees: qualifying shares: valuation issues
  • BIM44360 · Providing shares to employees: qualifying shares: restricted or convertible shares: introduction
  • BIM44385 · Providing shares to employees: qualifying shares: restricted shares
  • BIM44390 · Providing shares to employees: qualifying shares: restricted shares: examples
  • BIM44400 · Providing shares to employees: qualifying shares: convertible shares
  • BIM44405 · Providing shares to employees: qualifying shares: convertible shares: examples
  • BIM44410 · Providing shares to employees: qualifying shares: cash cancelled and net settled share options
  • BIM44411 · Providing shares to employees: qualifying shares: cash cancelled and net settled share options: deductions allowable
  • BIM44412 · Providing shares to employees: qualifying shares: cash cancelled: examples
  • BIM44413 · Providing shares to employees: qualifying shares: net settled examples
  • BIM44414 · Providing shares to employees: qualifying shares: payment made in excess of fair value ("EFV")
  • BIM44415 · Providing shares to employees: Cash Cancelled and Net Settled Options - Interaction with Deferred Remuneration
  • BIM44450 · Providing shares to employees: non-qualifying shares: introduction
  • BIM44455 · Providing shares to employees: non-qualifying shares: through an employee benefit trust
  • BIM44457 · Providing shares to employees: non-qualifying shares: through an employee benefit trust: whether contributions deductible
  • BIM44458 · Providing shares to employees: non-qualifying shares: through an employee benefit trust: tax cases
  • BIM44460 · Providing shares to employees: non-qualifying shares: through global share schemes
  • BIM44463 · Providing shares to employees: non-qualifying shares: through global share schemes: tax case
  • BIM44465 · Providing shares to employees: non-qualifying shares: new shares issued direct to employees
  1. Specific deductions: employee share schemes: contents
  2. Specific deductions: employee share schemes: providing shares to employees: overview

BIM44250 | Specific deductions: employee share schemes: providing shares to employees: overview

From HM Revenue & Customs · Business Income Manual

Deductions for providing shares to employees fall into the following categories:

  • Providing shares through Share Incentive Plans (SIPs), see BIM44251.

  • Providing shares (other than through a SIP) which meet the qualifying conditions for a statutory Corporation Tax deduction (referred to in this guidance as ‘qualifying shares’), see BIM44260.

  • Providing shares which are not qualifying shares (referred to in this guidance as ‘non-qualifying shares’), see BIM44450.

Qualifying shares

‘Qualifying shares’ for this purpose are those which meet the qualifying conditions for a statutory CT deduction. These are shares which give the employees a real stake in the company or group by which they are employed. Full details of the qualifying requirements are at BIM44285.

In practice it is reasonable to assume that shares provided under Tax advantaged schemes (see BIM44010) will be qualifying shares as the qualifying conditions are very similar.

Shares provided under other employee share schemes (see BIM44005) may also be qualifying shares.

Non-qualifying shares

The following are not qualifying shares:

  • Partly-paid shares.

  • Redeemable shares.

  • Preference shares.

  • Unlisted shares in a subsidiary company (unless its parent company is a listed and non-close company).

  • Shares in a company which is not sufficiently linked to the employing company at the date the employee acquires the shares, or at any earlier date on which the employee was given a right (such as a share option) to acquire the shares.

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