Comparison of share schemes

Produced by Tolley in association with

Employment Tax

Guidance

With four types of tax-advantaged share scheme available, plus numerous other non-advantaged alternatives, it can be difficult for an employer to decide on the best choice for their own situation.

There are a number of simple differentiations that can offer a starting point:

•
is this scheme available to all employees or a selected few?
•
are shares to be offered immediately?
•
would share options be preferable?
•
is tax saving a major consideration?
•
is the company willing to accept significant upfront cost and future administrative commitment?

Tax-advantaged schemes

There are currently four types of tax-advantaged share scheme, with varying conditions and requirements. Many of the requirements and restrictions are harmonised across the schemes, but differences remain. These are described in more detail in the guidance notes on each individual scheme. Enterprise management incentive (EMI) plans and company share option plans (CSOP) are both selective which means that companies can choose which employees can participate in the plan and to what extent. Share incentive plans (SIPs) and save as you earn (SAYE)

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