The following Share Incentives Q&A provides comprehensive and up to date legal information covering:
When the founders of a business take shares in the newly incorporated company they will usually either subscribe for the shares or take a transfer of shares from the entity which is forming the new company. Although these shares are often referred to for convenience as founder shares, the shares will be no different from a tax perspective to shares which are subsequently issued to non-founding directors and employees.
Part 7 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003) imposes a charging regime in relation to all shares which are employment-related securities. A share will be an employment-related security if the shares were actually acquired by reason of employment or are deemed to be by reason of employment.
The 'deeming' provision under ITEPA 2003, s 421B is particularly key, as this has the effect that if an individual acquires shares by his employer or a person connected with his employer then those shares will automatically be treated as emplo
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