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CX 17: Benefits provided to employees who are shareholders or investors
or “Rules for taxing non-cash benefits given to employee shareholders or investors”
You could also call this:

“Tax rules for benefits given to people connected to both employees and company owners”

If you work for a company, and someone connected to you gets something nice from the company, it might be treated as a special kind of benefit called a fringe benefit. This happens when:

  • The person getting the nice thing is connected to you, and you’re an employee of the company.
  • The company that employs you is giving out this nice thing.
  • The person getting the nice thing is also connected to someone who owns part of the company.
  • The person getting the nice thing isn’t a company themselves.
  • The person getting the nice thing doesn’t own any part of the company.
  • If the nice thing was given to the company owner instead, it would be considered a dividend.

When all these things are true, the nice thing given to the person connected to you is treated as a fringe benefit. This means it follows special tax rules for fringe benefits. It’s not treated as a dividend, even though it would be if it was given to the company owner.

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Next up: CX 19: Benefits provided instead of allowances

or “Employer-provided benefits that replace certain tax-free allowances”
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Part C Income
Excluded income: Fringe benefits

CX 18Benefits provided to associates of both employees and shareholders

  1. This section applies when—

  2. a benefit provided to an associated person of an employee would be treated as a fringe benefit under section GB 32 (Benefits provided to employee’s associates) in the absence of section CX 4; and
    1. the employer is a company; and
      1. the associated person is also associated with a shareholder in the company; and
        1. the associated person is not a company; and
          1. the associated person is not a shareholder in the company; and
            1. the benefit would be a dividend if provided to the shareholder.

              1. The benefit is subject to the FBT rules and is treated as not being a dividend.

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