Corporation Tax Act 2009 section 1011

Calculation of relief if shares are restricted or convertible

Section 1011 explains how to calculate the corporation tax relief available to an employer when an employee acquires shares that are restricted, convertible, or both.

• For restricted shares, the employer's relief equals the amount charged as the employee's earnings from the employment on acquisition, with the valuation reflecting any restrictions unless the employer and employee have jointly elected otherwise.
• For convertible shares, the employer's relief also equals the employee's earnings charge, but the shares are valued as if the conversion feature did not exist.
• Where shares are both restricted and convertible, the employer claims the higher of the two relief amounts calculated under the restricted shares rule and the convertible shares rule.
• "Relevant earnings" means general employment earnings and any amount treated as earnings in respect of employee shareholder shares, but excludes any exempt income.