SIP—eligibility requirements and self-certification process

A share incentive plan (SIP) gives employees the opportunity to acquire shares in their employer or a parent company of the employer on a tax-efficient basis.

As SIPs are designed to be offered to all employees (rather than on a selective basis), they tend to be operated by larger listed companies.

If the statutory provisions are met and the SIP is correctly notified to HMRC, favourable tax treatment can result.

The SIP regime sets out numerous requirements that must be met, including in relation to:

1. •

   the employees that are eligible to participate

2. •

   the shares subject to awards, and

3. •

   the SIP trust and trustees

This subtopic provides a detailed analysis of the SIP qualifying criteria.