Corporation Tax Act 2009 section 1027

Relief available on death of employee

Section 1027 provides a corporation tax deduction for an employer company when an employee who holds restricted shares dies, based on the notional employment income that would have arisen had the shares been deemed sold immediately before death.

• Relief is given in the accounting period in which the employee dies
• The amount of relief equals the employment income that would have been taxed on the employee had the restricted shares been deemed sold to an unconnected person immediately before death
• Certain expenses and adjustments under the income tax rules for restricted shares are excluded from the relief calculation
• Any non-commercial increase in the market value of the restricted shares after acquisition is disregarded when computing the relief