519B Costs of establishing savings-related share option schemes

Summary

The cost of setting up a savings-related share option scheme is allowable as a deduction for corporation tax purposes. However, the cost to a company of enabling a “relevant body” to acquire scheme shares is not deductible.

Details

(1) Subject to subsection (2A), the cost incurred, on or after the 6 April, 1999, in establishing a savings-related share option scheme approved by the Revenue Commissioners in accordance with Schedule 12A and under which no employee or director has obtained rights prior to such approval is an allowable deduction in computing the profits or gains of a trade carried on by that company.

(2) Where such expenditure is incurred by a management or an assurance company, it may be added to its management expenses for the purpose of providing relief to such a company in respect of the sums in question.

(2A) A corporation tax deduction is not, however, available for expenses incurred by a company in enabling a “relevant body” to acquire scheme shares.

(3) If approval for the savings-related share option scheme is given later than 9 months after the end of the accounting period in which the sum is expended, then the sum is treated as expended in the accounting period in which the approval is given and not in the accounting period in which the sum is expended.

Relevant Date: Finance Act 2021