Finance Act 2003

Relationship between relief and other deductions: exclusion of other deductions

25 (1) Where relief under this Schedule is available for any accounting period, no other deduction is allowed for any corporation tax purposes (whether for that or any other period) in respect of the cost of providing the shares.

This applies to any deduction, whether by the employing company or any other company, in computing chargeable profits for the purposes of corporation tax.

(2) For this purpose the cost of providing the shares—

(a) means expenses directly related to the provision of the shares, and

(b) includes, in a case where the shares are acquired under an employee share scheme, any amount paid or payable by the employing company in respect of the participation of the employee in that scheme.

(3) The following are not regarded as part of the cost of providing the shares—

(a) expenses incurred in establishing the employee share scheme under which the recipient acquires the shares;

(b) expenses incurred in meeting, or contributing to, the costs of administering the scheme;

(c) the costs of borrowing for the purposes of the scheme;

(d) fees, commission, stamp duty and similar incidental expenses of acquiring the shares.

(4) In this paragraph “employee share scheme” means any scheme or arrangement for enabling shares to be acquired by reason of employees' employment.