HMRC has announced in its latest ‘Employment-related securities bulletin’ that with effect from 6 April 2019 it will no longer accept certain instruments issued by companies in Switzerland, Germany, Austria and France as satisfying the ordinary share capital condition for the purposes of the employment-related securities legislation.
The instruments affected are known as ‘jouissance shares’ (‘actions de jouissance’ in French and ‘Genußscheine’ in German). Although carrying an interest in dividends and in a winding-up to unpaid dividends, these instruments do not carry an interest in company capital, meaning HMRC will no longer regard them as shares in share capital.
HMRC has previously approved schemes that include such instruments and says it will honour existing tax-advantaged treatment in relation to interests or options already granted.
At the same time, HMRC has concluded that building society permanent interest-bearing shares (PIBS) are, in reality, subordinated debt instruments and should also never have been accepted as ‘shares’ in capital. On the other hand, Swiss participation certificates (with par value, as distinct from profit sharing certificates) will qualify as shares in company capital.
With immediate effect, HMRC will no longer accept those ‘shares’ which it no longer regards as shares in company capital as meeting the ordinary shares requirement for corporation tax relief on employee share acquisitions under CTA 2009 Part 12.
See ‘Employment-related securities bulletin 31’ at bit.ly/2U81OeB.
HMRC has announced in its latest ‘Employment-related securities bulletin’ that with effect from 6 April 2019 it will no longer accept certain instruments issued by companies in Switzerland, Germany, Austria and France as satisfying the ordinary share capital condition for the purposes of the employment-related securities legislation.
The instruments affected are known as ‘jouissance shares’ (‘actions de jouissance’ in French and ‘Genußscheine’ in German). Although carrying an interest in dividends and in a winding-up to unpaid dividends, these instruments do not carry an interest in company capital, meaning HMRC will no longer regard them as shares in share capital.
HMRC has previously approved schemes that include such instruments and says it will honour existing tax-advantaged treatment in relation to interests or options already granted.
At the same time, HMRC has concluded that building society permanent interest-bearing shares (PIBS) are, in reality, subordinated debt instruments and should also never have been accepted as ‘shares’ in capital. On the other hand, Swiss participation certificates (with par value, as distinct from profit sharing certificates) will qualify as shares in company capital.
With immediate effect, HMRC will no longer accept those ‘shares’ which it no longer regards as shares in company capital as meeting the ordinary shares requirement for corporation tax relief on employee share acquisitions under CTA 2009 Part 12.
See ‘Employment-related securities bulletin 31’ at bit.ly/2U81OeB.
