UK Finance Cos. Can Deduct Stock Option Debits, Court Rules

Law360 (May 21, 2020, 7:06 PM EDT) -- Two U.K.-based financial companies can deduct debits resulting from stock option grants to their employees for the purpose of calculating their profits for the country's corporation tax, England and Wales' second-highest court said Thursday.

The ruling is a loss for HM Revenue & Customs, which challenged brokerage firm NCL Investments and accounting firm Smith & Williamson on the grounds that the debits were not expenses that would have entitled the firms to deductions under U.K. law. The Court of Appeal, however, said debits are deductible expenses if they are recorded in line with proper accounting principles for determining trade profits....

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