Corporation Tax Act 2009 section 1000

Deduction for costs of setting up employee share ownership trust

Section 1000 provides corporation tax relief for the costs a company incurs in setting up a qualifying employee share ownership trust (QUEST).

• A company may deduct the costs of setting up a QUEST when calculating its trading or property business profits for corporation tax purposes
• If the company is an investment company rather than a trading or property business, the set-up costs are instead treated as deductible management expenses
• Where the trust is established more than 9 months after the end of the period of account in which the costs were incurred, the deduction is shifted to the period in which the trust is actually established
• The deduction is specifically allowed even though the costs would normally be disallowed as capital expenditure