Corporation Tax Act 2009 section 993

Plan termination notice

Section 993 deals with the partial clawback of a corporation tax deduction when a company terminates its Share Incentive Plan before all the shares acquired for the plan trust have been awarded to employees.

• Where a company has claimed a tax deduction for contributions to a SIP trust and then terminates the plan early, a proportion of that deduction is clawed back.
• The clawback applies only to the extent that shares purchased for the plan remain unawarded at the date the plan termination notice is issued.
• The clawback is calculated as the proportion of unawarded shares to total acquired shares, applied to the original deduction amount.
• The company is treated as receiving a taxable amount equal to this proportion on the date the termination notice is issued.