Taxes Consolidation Act 1997 section 517

Payments to trustees of approved profit sharing scheme

Section 517 allows a company operating or participating in an approved profit sharing scheme to deduct payments made to the scheme trustees when computing its profits for corporation tax purposes, subject to certain conditions and limits.

• Payments to APSS trustees are deductible only if the trustees apply the funds in acquiring shares for appropriation to eligible participants within nine months of the end of the relevant period of account (or a longer period if Revenue permit), or if the payment covers the trustees' reasonable scheme administration costs.
• A trading company's deduction cannot exceed its trading income for the accounting period after adjusting for trading losses, terminal losses, capital allowances, balancing charges and stock relief; an investment company's deduction cannot exceed its income after deducting other management expenses, so contributions cannot create or increase a loss.
• Revenue may further restrict the deduction to an amount they consider reasonable, having regard to the number of participating employees or directors, their remuneration levels, the services they have rendered and the length of their service.
• Where multiple payments are made to the trustees, the trustees are treated as applying those sums on a first in, first out basis for the purposes of determining whether the conditions for relief have been met.