The following Employment Tax guidance note by Tolley in association with Caroline Harwood of Burges Salmon LLP provides comprehensive and up to date tax information covering:
Companies engage in more complex planning for their share incentive arrangements for a number of reasons. These include funding issues for participants where:
As such, more complex plans aim to provide a share-based award for employees with a low initial value but with the potential to generate growth in the shares that is subject to capital gains tax rather than income tax.
This note looks at two different structures often used to achieve this aim by summarising the commercial considerations, an outline of the structure and briefly discusses the tax treatment of each:
It should be emphasised that professional advice should be taken before embarking on the implementation of either of these arrangements, as this note is a summary and not a comprehensive guide.
The objective of both of these arrangements is to reward the participating employee with an increase in the value of shares in his employing company or group, often linked to corporate performance conditions, in a tax efficient manner. The theory is
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