Corporation Tax Act 2009 section 1015B

Application of Chapter in relation to employees of overseas companies who work for companies in the UK

Section 1015B enables a UK host company to claim corporation tax relief on share option acquisitions when an employee of an overseas company works in the UK for that host company under secondment or similar arrangements.

• Where an employee of a non-UK resident company works in the UK for a host company that is within the charge to corporation tax, the employee is treated as having a deemed employment with the host company for the purposes of share option relief
• If the employee obtains a share option through their actual overseas employment, acquires shares under that option, and has employment income taxed under ITEPA 2003 because of their work for the host company, the option is treated as if it were obtained because of the deemed employment with the host
• The amount of relief the host company can claim is capped at the total employment income of the individual that is actually charged to UK tax under ITEPA 2003 in relation to the share acquisition, and only one company may claim relief in respect of the same share acquisition
• When applying the conditions about the shares acquired, references to the employing company are extended to include the overseas employer, and a person is regarded as working for another if they provide, and are obliged to provide, personal service to that other person