Section 6(5) ITEPA 2003, Section 16B ITTOIA 2005, Section 40A CTA 2009

As shown at EIM02504, directors' fees paid to a company may be exempt from charge to income tax under Part 2 of ITEPA and charged instead as receipts of a trade carried on by that company. Section 16B of the Income Tax (Trading and Other Income) Act 2005 and section 40A of the Corporation Tax Act 2009 set out the conditions that must be met before this treatment of the directors' fees can be allowed.

The treatment can apply where:

a company (the paying company) makes a payment to, or for the benefit of, a director in respect of the director's employment as a director of that company

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