Payment in shares?

[Nonimous]

Company A has been doing some work for Company B, and the agreement was that if it was completed by a certain date there would be a bonus payment.

Obviously a bonus payment would attract corporation tax in the same way as anything else would.

However, company B has now suggested offering shares at par as a reward instead.

I can't see why they shouldn't (other than the risk of company B going bust I suppose), but am I right that the tax treatment will be that corporation tax is due on the market value at the date the shares are taken less any amount company A pays for them?

[Incredulum]

The tax treatment will probably follow the accounting treatment which will probably be as you describe.