Scheme design and financial considerations (including valuation and accounting)

Scheme design and financial considerations (including valuation and accounting) guidance:

Relationship with accounting As well as share based payments (SBP) accounting for the costs of employees, share schemes usually involve accounting for the issue of new...

Practice Note

A cash settled share based payment (SBP) expense arises when an employee provides services in return for the company accepting a liability or obligation to pay the...

Practice Note

This Practice Note looks at some of the more complex issues associated with the equity settled accounting regime. For a more basic overview of the equity settled...

Practice Note

This Precedent is a sample bonus schedule, to be inserted as a schedule to an employment contract or director’s service agreement, providing for entitlement to an annual...

Precedents

When a person disposes of an asset and makes a profit that is capital in nature, this has the potential to be a taxable capital gain. It may be possible to avoid a tax...

Practice Note

Entrepreneurs' relief is a capital gains tax (CGT) relief designed to encourage individuals to set up and expand their own businesses. Provided that the conditions are...

Practice Note

Convertible securities are: • employment-related securities (see: What is an employment-related security?) • with the capacity to convert into securities of a different...

Practice Note

This note explains the income tax treatment of convertible securities. The definition of convertible securities is set out in Convertible securities—definition. The basic...

Practice Note

Corporation tax deduction for costs incurred in setting up and operating employee share schemes Costs incurred in setting up and operating an employees’ share scheme may...

Practice Note

Private companies that implement share option schemes will often make use of 'exit-only' options, meaning that share options can only be exercised by participants when...

Practice Note

Why do you need to obtain a CSOP valuation? A valuation of the shares granted under company share option plan (CSOP) options will often be required at different stages of...

Practice Note

Employee share scheme participants and shareholders This note looks at the issues arising on the death of a participant in both HMRC tax-advantaged schemes and various...

Practice Note

This Practice Note describes the rules on the disclosure of tax avoidance schemes (DOTAS) applying to income tax, corporation tax, capital gains tax (CGT) and National...

Practice Note

This Practice Note covers the procedural aspects of the rules on the disclosure of tax avoidance schemes (DOTAS) applying to income tax, corporation tax, capital gains...

Practice Note

What are discretions in employee share schemes? It is common to see contracts include powers for a party to determine a particular matter ‘in its absolute discretion’....

Practice Note

Employers frequently grant equity awards and cash bonuses to incentivise key employees. The first part of this Practice Note focuses on key considerations with awards...

Practice Note

An earn-out is a particular way of structuring the consideration payable for the acquisition of shares in a company (the Target) where at least part of the price is to be...

Practice Note

Brexit: As of exit day (11pm on 31 January 2020) the UK is no longer an EU Member State. However, in accordance with the Withdrawal Agreement, the UK has entered an...

Practice Note

Restricted shares and EMI valuations Restricted shares are shares which are subject to any restrictions described in sections 423(2)–(4) of the Income Tax (Earnings and...

Practice Note

Employment-related securities and securities options The definition of an employment-related security is broadly any security (which includes shares, certain rights under...

Practice Note

Employers (or other responsible persons) are required to provide specified information to HMRC in relation to reportable events involving employment-related securities or...

Practice Note

Entrepreneurs' relief Entrepreneurs' relief (ER) is a capital gains tax (CGT) relief designed to encourage individuals to set up and expand their own businesses. Provided...

Practice Note

Background Entrepreneurs’ relief (ER) is available for shares in trading companies provided the conditions in sections 169H–169SH Taxation of Chargeable Gains Act 1992...

Practice Note

This Practice Note provides a brief introduction to the equity and incentive compensation plans and agreements that US startups often use to attract and retain key...

Practice Note

This Practice Note provides an overview of the issues that investors and management will need to consider in relation to founder shares and employee shares and what they...

Practice Note

The procedure for making joint restricted securities elections is the same regardless of whether the election is made under section 425(3), 430 or 431 of the Income Tax...

Practice Note