Corporation Tax Act 2009 section 984

Chapter to form part of SIP code etc.

Section 984 establishes that this chapter forms part of the Share Incentive Plan (SIP) code and sets out how forfeited plan shares are treated for the purposes of the chapter.

• This chapter is part of the SIP code, meaning that the definitions used in the SIP legislation in Schedule 2 to the Income Tax (Earnings and Pensions) Act 2003 apply throughout the chapter.
• When an employee's plan shares are forfeited — for example, because the employee leaves the company — those shares are treated as having been acquired by the plan trustees at the point of forfeiture and for no consideration.
• No further corporation tax deduction is available to the company if forfeited shares are subsequently re-awarded to another participant.
• The deemed acquisition date and nil cost basis are used to determine whether forfeited shares form part of a later award of shares under the plan.