Corporation Tax Act 2009 section 1038B

Employee shareholder shares

Section 1038B provides that the deemed £2,000 payment made by an employee shareholder is ignored when calculating corporation tax relief available to the employing company.

• When an individual acquires employee shareholder status, they are treated as having paid £2,000 for their shares under income tax rules.
• This deemed £2,000 payment is disregarded for the purposes of Part 12 of the Corporation Tax Act 2009, which deals with various reliefs available to companies.
• The disregard applies both to whether a company qualifies for relief and to the amount of any relief it can claim.
• The effect is that the employing company's tax relief position is not altered by the notional £2,000 consideration the employee shareholder is deemed to have paid.