The following Share Incentives practice note Produced in partnership with Stephen Woodhouse and William Franklin provides comprehensive and up to date legal information covering:
Absent the specific statutory rules relating to employment related securities considered below, an award of an interest in jointly owned shares offered to an individual as part of their overall remuneration package would be taxed as normal remuneration.
However, the interest acquired by an employee is an ‘interest in an employment-related security’.
In addition, the amount of tax is likely to be affected by the impact of the specific rules in ITEPA 2003 relating to restricted securities.
Typically, therefore, to avoid any future income tax and National Insurance contributions (NICs) charges arising upon the lifting or variation of such restrictions, the employer and employee will enter into a joint election under section 431 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003).
This practice note proceeds to examine each of these taxation points in further detail below.
For more general information on joint share ownership plans (JSOPs) and awards, see Practice Note: Introduction to joint share ownership plans.
The interest acquired by an employee is an ‘interest in an employment-related security’. The statutory regime relating to employment related securities applies to:
'securities, or an interest in securities, acquired by a person where the right or opportunity to acquire the securities or interest is available by reason of an employment of that person or
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