Joint ventures and tax-advantaged share schemes
Joint ventures and tax-advantaged share schemes

The following Share Incentives practice note provides comprehensive and up to date legal information covering:

  • Joint ventures and tax-advantaged share schemes
  • What is a joint venture?
  • Types of JVs
  • Assumptions
  • The effect of a JV on tax-advantaged share schemes
  • Effect of a JV when subsequently establishing a new tax-advantaged share scheme
  • Establishing a new EMI scheme
  • Can a JVP establish a new CSOP, SAYE scheme and/or SIP over its own shares?
  • Can a JVCo establish a new CSOP, SAYE scheme and/or SIP over shares in its JVPs?
  • Effect of a JV on transferring employees
  • More...

What is a joint venture?

A joint venture (JV) is a commercial arrangement entered into by two or more independent parties whereby each party agrees to develop, often for a finite time, a new entity by contributing equity or other assets. For the purposes of this Practice Note, the new entity will be referred to as the joint venture company (JVCo). The parties exercise control over the JVCo and consequently will typically share revenues, expenses and ownership. There are no specific laws, including tax laws, applicable to JVs and no technical legal meaning of the term.

A JV can take many forms. For example, it may be operated through a separate JV vehicle, commonly a limited liability company or a partnership. Alternatively, and at its simplest, it may be an arrangement between participants—the JV parties—whereby those participants do not form a separate legal entity, but rather associate with one another simply by means of a contractual arrangement.

For further, more general information on JVs, see Practice Note: Setting up a corporate joint venture—initial considerations.

This Practice Note seeks only to detail the direct effect a JV may have on tax-advantaged share schemes. JVs may also indirectly have an impact on tax-advantaged share schemes due to their implications on other areas of law, including on:

  1. the Companies Act 2006 (CA 2006) definition of employees' share schemes

  2. the Financial Services and Markets

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