Employment-related securities

Various income tax and National Insurance contributions (NICs) charges can arise for an employee or director in relation to the acquisition, ownership or disposal of employment-related securities. Associated PAYE and NICs obligations can also arise for the employing company.

What is an employment-related security?

A security (which includes shares, debt, derivatives and interests in investment partnerships) will be an employment-related security where the right or opportunity to acquire the securities (or interest in securities) is:

•
available by reason of an employment of the person acquiring the securities (or interest) or any other person, or
•
made available by a person's employer (or a person connected with a person's employer) (the deeming provision) unless such right or opportunity is made available:
1. ◦
  by an individual, and
2. ◦
  in the normal course of the domestic, family or personal relationships of that individual

For these purposes, employment includes a former, current and prospective employment.

The rules on employment-related securities apply very broadly because of the deeming provision. It means that the employment-related securities rules must be considered whenever shares are acquired in the employing company or a connected company.

For

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