Income Tax (Trading and Other Income) Act 2005 section 752

Interest under employees' share schemes

Section 752 provides an exemption from income tax for trustees of employees' share schemes in respect of interest they receive from scheme participants, where the scheme requires them to pass an equivalent amount back to the company.

• The section applies to schemes set up to comply with section 682(2)(b) of the Companies Act 2006, which deals with financial assistance for employees' share schemes
• The trustees must receive interest from a participant in the scheme for the exemption to be relevant
• Where the scheme requires the trustees to pay the company an equivalent amount as interest, no income tax liability arises for the trustees on the interest they receive
• The exemption applies specifically to income tax that would otherwise be charged under the savings and investment income rules (Chapter 2 of Part 4 of the Act)