Non tax-advantaged share awards

By Tolley

The following Corporation Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Non tax-advantaged share awards
  • Summary
  • Key considerations
  • Further reading


HMRC tax-advantaged share award plans are limited in size, tightly defined and, broadly, require awards to be offered to all staff. See the Share incentive plans guidance note. Accordingly, any awards outside this type of plan will be considered non tax-advantaged (previously known as ‘unapproved’).

Typically, share awards are seen in the reward packages of senior executives and key employees, often as part of a wider long-term incentive plan (LTIP).

Although there may be some similarities between awards of shares and grant of options, the key difference is that with options the actual ownership of the share is delayed until the option is exercised. In addition to practical considerations (such as the clock for entrepreneurs’ relief), it may be considered more incentivising for employees to have ownership from an earlier date.

For commentary on entrepreneurs’ relief, see the Conditions for entrepreneurs’ relief guidance note.

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