Corporation Tax Act 2009 section 1017

Condition relating to employee's income tax position

Section 1017 sets out the condition that must be satisfied regarding the employee's income tax position when shares are acquired under an employment-related share option, as part of the rules governing corporation tax deductions for share acquisitions.

• The acquisition of shares must be a chargeable event for income tax purposes under section 476 of ITEPA 2003
• The condition is met regardless of whether any amount actually counts as employment income of the employee as a result of the event
• This means the condition can be satisfied even where shares are acquired under an approved share option scheme that carries no income tax charge on acquisition
• If the employee has died before the shares are acquired, the condition is treated as met provided it would have been met had the employee still been alive