Corporation Tax Act 2009 section 990

Withdrawal of deduction under section 989

Section 990 deals with the circumstances in which HMRC can withdraw a corporation tax deduction previously given to a company that contributed money to a Share Incentive Plan trust to acquire shares, where those shares are not awarded to employees within specified time limits.

• HMRC may withdraw the deduction if fewer than 30% of the acquired shares have been awarded under the plan within 5 years of the trustees acquiring them, or if not all acquired shares have been awarded within 10 years.
• The withdrawal is effected by treating the paying company as receiving taxable income equal to the original deduction, at the date the direction is made.
• Where trustees acquire shares on different days, shares acquired earlier are treated as having been awarded before shares acquired later (a first-in, first-out basis).
• The withdrawal provisions also apply where the original deduction was given under the predecessor legislation before the Corporation Tax Act 2009 came into force.