Part C
Income
Income from equity
CD 20Benefits of shareholder-employees or directors
A non-cash benefit provided by a company to an employee is a dividend if—
- the benefit is an unclassified benefit; and
- the employee is a shareholder in the company; and
- the company chooses, under section CX 17(2) (Benefits provided to employees who are shareholders or investors), to treat the benefit as a dividend.
A non-cash benefit provided by a company to a non-executive director of the company is a dividend if the director is a shareholder in the company, even if the benefit is provided solely because the director is a non-executive director.
In any other case of a non-cash benefit provided by a company to a person who is both an employee and a shareholder, the benefit is not a dividend if—
- the application of section CX 17(2) means it is a fringe benefit; and
- section CD 32 accordingly excludes it from being a dividend.
In this section, non-executive director means a person whose only services to the company as an employee are the formal occupation of the role of director and compliance with the associated statutory obligations.
Compare
- 2004 No 35 s CD 12