The following Share Incentives guidance note Produced in partnership with William Franklin and Stephen Woodhouse of Pett Franklin provides comprehensive and up to date legal information covering:
Jointly owned shares are no more and no less than their description implies, namely shares owned jointly by an employee or director and a third party, either an investor in the company or, more commonly, the trustees of an employee benefit trust (EBT).
The concept of joint share ownership was developed as an alternative to other forms of shares incentives such as share options, restricted shares or performance shares plans (often using nil cost options).
The benefit delivered under a joint share ownership plan (JSOP) award is equal to the increase in share value post-grant (normally increased by a ‘carrying cost’), and therefore a JSOP award is similar to a market value share option but with a different tax treatment.
The structure has several commercial advantages compared with other forms of awards. These include:
Compared with share options or performance share plans with delayed share acquisition:
a direct alignment of the interests of the participants and other shareholders due to the participant acquiring immediate beneficial ownership of an interest in the shares
due to this ownership, the immediate ability for participants to receive dividends in line with their share interest
when structured and implemented correctly, any gain realised under a JSOP award should be subject to capital gains tax (CGT) rather than income tax and
**excludes LexisPSL Practice Compliance, Practice Management and Risk and Compliance. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
To view the latest version of this document and thousands of others like it, sign-in to LexisPSL or register for a free trial.
Existing user? Sign-in
Take a free trial
Take a free trial
0330 161 1234