Angela Savin and Michael Brady (KPMG Law) review the impact of a recent Supreme Court ruling.
The taxpayers recognised accounting charges under International Financial Reporting Standard 2 (IFRS 2) in respect of share options granted to their employees by an employee benefit trust (EBT).
The options lapsed without being exercised so no corporation tax relief was available under the specific statutory rules for employee share schemes. The employing companies therefore instead claimed corporation tax relief in respect of the accounting debits under the general rule that the profits of a trade subject to corporation tax are those calculated in accordance with generally accepted accounting practice (GAAP) ‘subject to any adjustment required or authorised by law’.
HMRC’s position however was that on various grounds the law did in fact require an adjustment to the accounting profit so as to deny relief for the debits recognised under IFRS 2.
The...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
Angela Savin and Michael Brady (KPMG Law) review the impact of a recent Supreme Court ruling.
The taxpayers recognised accounting charges under International Financial Reporting Standard 2 (IFRS 2) in respect of share options granted to their employees by an employee benefit trust (EBT).
The options lapsed without being exercised so no corporation tax relief was available under the specific statutory rules for employee share schemes. The employing companies therefore instead claimed corporation tax relief in respect of the accounting debits under the general rule that the profits of a trade subject to corporation tax are those calculated in accordance with generally accepted accounting practice (GAAP) ‘subject to any adjustment required or authorised by law’.
HMRC’s position however was that on various grounds the law did in fact require an adjustment to the accounting profit so as to deny relief for the debits recognised under IFRS 2.
The...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
92c425bb-7613-43d0-8144-daba6309c6e7.jpg?sfvrsn=bf8238ad_1)
