Section CD 20 — Income Tax Act 2007: Benefits of shareholder-employees or directors

CD 20 Benefits of shareholder-employees or directors Unclassified fringe benefits (1) A non-cash benefit provided by a company to an employee is a dividend if— (a) the benefit is an unclassified benefit; and (b) the employee is a shareholder in the company; and (c) the company chooses, under section CX 17(2) (Benefits provided to employees who are shareholders or investors), to treat the benefit as a dividend. Non-executive directors’ non-cash benefits (2) 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. Other shareholder-employee benefits (3) 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— (a) the application of section CX 17(2) means it is a fringe benefit; and (b) section CD 32 accordingly excludes it from being a dividend. Meaning of non-executive director (4) 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. Defined in this Act: company , director , dividend , employee , fringe benefit , non-executive director , shareholder , unclassified benefit Compare: 2004 No 35 s CD 12