Corporation Tax Act 2010 section 1065

Exception for benefits treated as employment income etc.

Section 1065 carves out specific categories of employee-related expenditure from the rule in section 1064 that treats certain close company expenses as distributions.

• Expenses on benefits in kind (company cars, vans, beneficial loans and other taxable benefits) for employees already caught by the employment income benefits code are excluded from the distributions rule, because those benefits are taxed as employment income instead.
• Expenses on employment-related living accommodation provided to any person are similarly excluded.
• Expenses on death-in-service or retirement benefits (pensions, annuities, lump sums, gratuities or similar) for the spouse, civil partner, children or dependants of an employee of the company are also excluded.
• The exclusion covers both the direct cost of providing the benefit and any expenses connected with that provision.