Taxes Consolidation Act 1997 section 519B

Costs of establishing savings-related share option schemes

Section 519B provides that the cost of establishing an approved savings-related share option scheme is a tax-deductible expense for corporation tax purposes.

• A company that incurs expenditure on or after 6 April 1999 in establishing a savings-related share option scheme approved by the Revenue Commissioners under Schedule 12A may deduct that cost as a trading expense or, in the case of an investment company or life assurance company, as a management expense.
• No employee or director may obtain rights under the scheme before Revenue approval is given; if they do, the deduction is not available.
• Any sum spent by the company, directly or indirectly, to enable a relevant body to acquire scheme shares is not deductible, whether as a trading expense or as a management expense.
• Where Revenue approval is given more than nine months after the end of the accounting period in which the expenditure was incurred, the cost is treated as incurred in the accounting period in which the approval is given rather than the period in which it was actually spent.