Corporation Tax Act 2009 section 1015

Basic requirements for relief under Chapter 3

Section 1015 sets out the basic conditions a company must meet to claim corporation tax relief when an employee (or someone connected to the employee) obtains an option to acquire shares and subsequently exercises that option.

• Relief is available where an employee's job relates to a qualifying business carried on by the employing company, and a share option is granted because of that employment
• A qualifying business is one carried on by the employing company that is within the charge to corporation tax on its profits (or would be, but for the foreign permanent establishment exemption)
• The person who receives the option (the "recipient") must actually acquire shares under it, and further conditions regarding the shares and the employee's income tax position must also be satisfied
• If the recipient dies and someone else subsequently acquires shares under the option, the relief rules apply as though the recipient were still alive and had acquired the shares personally