Link Report

“associated company”, in relation to a relevant employer, means a company which is that employer’s associated company within the meaning of section 432;

“control” has the same meaning as in section 432;

(iii) in the accounting period for which his or her employer was entitled to claim relief under section 766(2), performed 75 per cent 50 per cent or more of the duties of his or her employment in the conception or creation of new knowledge, products, processes, methods or systems,

(b) 75 per cent 50 per cent or more of the cost of the emoluments whose emoluments that arise from his or her employment with that relevant employer qualify as expenditure on research and development under section 766(1)(a) in the accounting period referred to in paragraph (a)(iii);

“relevant employer” means a company that is entitled to relief under section 766(2) and that employs a key employee;

(2)(a) Where, as respects an accounting period, a relevant employer surrenders an amount under section 766(2A) for the benefit of a key employee, then subject to subsection (3), on the making of a claim, that employee shall be entitled for a tax year to have the income tax charged on his or her relevant emoluments for that tax year reduced by the amount surrendered.

(3) (a) Notwithstanding subsection (2), the amount surrendered under section 766(2A) shall not for any tax year reduce the amount of income tax payable on the total income of a key employee including the employee concerned or, where section 1017 or 1019apply applies, on the total income of his or her spouse or his or her civil partner to not less than the income tax that would be charged if such total income were charged to income tax at a rate of 23 per cent.

(4) (a) Where, by virtue of subsection (3), part of the amount surrendered under section 766(2A) by a relevant employer to a key employee cannot be used by that employee to reduce the income tax charged on his or her relevant emoluments emoluments from that employer for the tax year referred to in subsection (2)(b), that employee shall be entitled to have the income tax charged on his or her relevant emoluments emoluments from that employer for the next tax year reduced by that part.

(b) If and so far as any part of the amount surrendered by a relevant employer under section 766(2A) to a key employee carried forward under paragraph (a) to the next tax year cannot be used in that next tax year, then it may be used in the next following tax year and so on for each succeeding tax year until the full amount of that part has been used or until the key employee referred to in paragraph (a) ceases to be an employee of the relevant employer that surrendered the amount under section 766(2A).

(b) If and so far as any part of the amount surrendered by a relevant employer under section 766(2A) to a key employee carried forward under paragraph (a) to the next tax year cannot be used in that next tax year, then it may be used in the next following tax year and so on for each succeeding tax year until the full amount of that part has been used or until the key employee referred to in paragraph (a) ceases to be an employee of the relevant employer that surrendered the amount under section 766(2A).

(5) The amount that a relevant employer is entitled to surrender, and so surrenders, under section 766(2A) to a key employee is exempt from income tax and shall not be reckoned in computing income for the purposes of the Income Tax Acts.

(3) (a) Notwithstanding subsection (2), the amount surrendered under section 766(2A) shall not for any tax year reduce the amount of income tax payable on the total income of a key employee including the employee concerned or, where section 1017 or 1019apply applies, on the total income of his or her spouse or his or her civil partner to not less than the income tax that would be charged if such total income were charged to income tax at a rate of 23 per cent.

(3) (a) Notwithstanding subsection (2), the amount surrendered under section 766(2A) shall not for any tax year reduce the amount of income tax payable on the total income of a key employee including the employee concerned or, where section 1017 or 1019apply applies, on the total income of his or her spouse or his or her civil partner to not less than the income tax that would be charged if such total income were charged to income tax at a rate of 23 per cent.

(9) Where for a tax year, an individual makes a claim for relief under this section an individual makes a claim for relief under this section or has the income tax charged on his or her emoluments reduced as a consequence of a claim under this section , the individual shall, notwithstanding anything to the contrary in section 950 or 1084 Part 41A or section 1084, be deemed for that tax year to be a chargeable person for the purposes of Part 41 Part 41A.