Non tax-advantaged share awards

Produced by a Tolley Personal Tax expert
Personal Tax
Guidance

Non tax-advantaged share awards

Produced by a Tolley Personal Tax expert
Personal Tax
Guidance
imgtext

Summary

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 are 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 business asset disposal relief usually starting from the date of share acquisition, see the Conditions for business asset disposal relief guidance note), it may be considered to be a better incentive for employees to have ownership from an earlier date.

Acquisition of the shares

The first consideration with any share award is to establish the market value of

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™
Powered by Tolley+™

Popular Articles

Settlor-interested trusts

Settlor-interested trustsWhat is a settlor-interested trust?A settlor-interested trust is one where the person who created the trust, the settlor, has kept for himself some or all of the benefits attaching to the property which he has given away. A straightforward example is where a settlor

14 Jul 2020 13:38 | Produced by Tolley Read more Read more

Losses on shares set against income

Losses on shares set against incomeUsually, allowable capital losses can only be set against chargeable gains. If the losses are not fully utilised against gains in the year in which they arise, the excess is carried forward to use against future gains. See the Use of capital losses guidance note

14 Jul 2020 12:12 | Produced by Tolley Read more Read more

Long service awards

Long service awardsEmployee recognition by an employer can be an important motivational tool, as well as having a positive effect on retention. Most employer awards made to an employee are treated as taxable earnings under ITEPA 2003, s 62 or as a benefit under ITEPA 2003, s 201 because they are

14 Jul 2020 12:11 | Produced by Tolley Read more Read more