Complex share award schemes

Produced by Tolley in association with

Employment Tax

Guidance

Companies engage in more complex planning for their share incentive arrangements for a number of reasons. These include funding issues for participants where:

•
the initial value of an award is relatively high
•
companies are having to deal with headroom issues (ie they may have reached their limits on shareholder dilution)
•
companies wish to take advantage of potentially beneficial tax treatment for their employees where such companies do not qualify for statutory tax advantaged plans which satisfy the requirements of ITEPA 2003, Schs 2–5 (the qualifying plans), including Enterprise Management Incentives (EMI) and company share option plan (CSOP)

As such, more complex plans aim to provide a share-based award for employees with a low initial value but with the potential to generate growth in the shares that is subject to capital gains tax rather than income tax.

This note looks at two different structures often used to achieve this aim by summarising the commercial considerations, an outline of the structure and briefly discusses the tax treatment of each:

•
jointly

Continue reading the full document

To gain access to additional expert tax guidance, workflow tools, and tax research, register for a free trial of Tolley+™

TAKE A FREE TRIAL NOW

Helen Wood

Founder, HLN WD TX , Employment Tax

Helen Wood is the founder of HLN WD TX, a share schemes and employee incentives advisory business.She qualified as a CA with ICAS in 2009 and has worked as a specialist reward and incentives advisor for 17 years, spending 13 of those at KPMG followed by 3 ½ years as an Associate Director at RSM. Helen has worked with businesses ranging from start-ups to fully listed companies, spanning owner-managed businesses, private equity portfolio companies, and AIM listed businesses.She advises on a wide range of employee share schemes and employment related securities matters including the design and implementation of effective management and employee incentives; tax valuation of employment related securities, buy and sell side transaction support, HMRC compliance, tax due diligence and employee ownership trust transactions.

Popular Articles

Value Added Tax

Exporting goods ― proof of export

Exporting goods ― proof of exportIn addition to the requirements laid down in the Exporting goods ― overview guidance note, businesses intending to zero-rate exported goods must hold satisfactory evidence that the goods have been delivered to a destination outside of the UK. If satisfactory evidence

15 Dec 2020 14:02 | Produced by Tolley Read more

Personal Tax

Payment of the remittance basis charge

Payment of the remittance basis chargeRemittance basis chargeThe remittance basis charge is an annual charge payable by ‘long-term’ UK residents for the privilege of claiming the remittance basis.Taxpayers who wish to utilise the remittance basis (but do not qualify for it automatically) must pay

14 Jul 2020 12:52 | Produced by Tolley Read more

Corporation Tax

Entity classification

Entity classificationImplications of entity classificationIf a subsidiary is established, it is important to determine how it will be treated for UK tax purposes as this will determine the basis on which it is taxed. A subsidiary may either be transparent (like a partnership, where the individual

14 Jul 2020 11:37 | Produced by Tolley Read more

��˾��ҹ��