What is the purpose of section 111 of the Corporation Tax Act 2009?

Section 111 provides transitional rules so that references to relief under Chapters 2 and 3 of Part 12 of the Corporation Tax Act 2009, when applied to shares or securities acquired before 1 April 2009, are read as references to the equivalent relief under Schedule 23 to the Finance Act 2003 as it applied at the time of acquisition.

When does section 111 of the Corporation Tax Act 2009 apply?

Section 111 applies when shares or other securities were acquired by employees during an accounting period ending before 1 April 2009, and the company subsequently needs to apply the post-acquisition or disposal rules in Chapters 4 and 5 of Part 12, which refer back to relief under Chapters 2 and 3 of the Act.

How does section 111 bridge the gap between the Finance Act 2003 and the Corporation Tax Act 2009?

Section 111 ensures that where Chapters 4 and 5 of Part 12 mention relief under Chapter 2 or 3, and the shares were acquired pre-April 2009, those references are treated as referring to Schedule 23 to the Finance Act 2003. This prevents the legislative restatement from inadvertently denying or altering relief a company was entitled to claim.

Can a company lose its entitlement to relief because the legislation was restated in the Corporation Tax Act 2009?

No. Section 111 preserves continuity of law by ensuring that relief originally obtained under Schedule 23 to the Finance Act 2003 is properly recognised when applying the disposal or post-acquisition charge rules in Chapters 4 and 5 of Part 12 of the Corporation Tax Act 2009 to pre-April 2009 share acquisitions.

Corporation Tax Act 2009 section 111

Relief under Chapters 4 and 5 of Part 12

Section 111 ensures that transitional rules apply when interpreting references to corporation tax relief on employee shares or securities acquired before 1 April 2009.

This section applies to shares or other securities acquired during an accounting period ending before 1 April 2009.
It deals with how references to relief under Chapters 2 and 3 of Part 12 of the Corporation Tax Act 2009 should be read for pre-April 2009 acquisitions.
Any such references should be treated as references to the relief that was available under Schedule 23 to the Finance Act 2003, as that schedule applied at the time the shares or securities were acquired.
This preserves continuity of law so that the older relief provisions are properly recognised when applying the later disposal or post-acquisition charge rules in Chapters 4 and 5.

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