Income Tax (Earnings and Pensions) Act 2003 section 492

No charge on partnership share money deducted from salary

Section 492 provides that salary deducted as partnership share money under a Share Incentive Plan partnership share agreement is exempt from income tax as employment income.

• Salary deducted as partnership share money is not subject to income tax as employment income
• The deduction must be made under a formal partnership share agreement within a Share Incentive Plan
• This is one of four key tax advantages associated with the award of shares through a Share Incentive Plan
• The terms "partnership share agreement" and "partnership share money" are specifically defined in the SIP legislation