Corporation Tax Act 2009 section 106

Award of shares to excluded employee

Section 106 deals with the corporation tax treatment of amounts received by a company when shares under a Share Incentive Plan were awarded to an excluded employee in an accounting period ending before 1 April 2009.

• This provision applies where a company receives an amount because shares were awarded to an excluded employee under a Share Incentive Plan in a pre-April 2009 accounting period.
• The normal rules for treating such receipts under the current legislation (section 986) do not apply to these amounts.
• Instead, the amount received is treated as a trading receipt of the company in the period of account when the shares were originally awarded to the excluded employee.
• This is a transitional rule ensuring that pre-April 2009 awards to excluded employees are taxed under the old rules rather than the current framework.