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HMRC internal manual

Business Income Manual

Specific deductions: employee share schemes: providing shares to employees: non-qualifying shares: new shares issued direct to employees

In the unlikely event that:

  • an employing company grants discounted share options over its own shares, and
  • those shares are ‘non-qualifying shares’, and
  • the share options, if and when exercised, will be satisfied by the company issuing new shares direct to the employees,

any deduction in the company’s profit and loss account should be added back in computing the employer’s profits taxable as trade or property business profits.