Employment Tax

Quoted companies ― an overview

Produced by Tolley in association with Andrew Rainford
  • 14 Oct 2021 19:09

The following Employment Tax guidance note Produced by Tolley in association with Andrew Rainford provides comprehensive and up to date tax information covering:

  • Quoted companies ― an overview
  • What is a quoted company?
  • What is the difference for options granted over shares in a quoted company?
  • When can employee share rights be granted, exercised or released?
  • Shareholder approval of employees’ share schemes
  • Limits
  • Share valuations and option price
  • Announcements
  • Prospectuses
  • Other matters
  • More...

Quoted companies ― an overview

What is a quoted company?

Reference to a quoted company is usually to a company where the shares inthe company are listed on the London Stock Exchange, any other international stock exchange, or on AIM or ICAP Securities and Derivatives Exchange (formerly the PLUS market and now known as ISDX) inthe UK.

What is the difference for options granted over shares ina quoted company?

Quoted companies are generally subject to additional legislation, codes or rules compared to private companies or unquoted public companies. These include the Listing Rules published by the Financial Conduct Authority (FCA) or its successor, the AIM Rules, UK Corporate Governance Code and the QCA Code Principles on Executive Remuneration produced by investors such as the Association of British Insurers (ABI).

For UK tax purposes, there is a distinction between shares listed on the London Stock Exchange Daily Official List (often referred to as fully listed) or on equivalent recognised stock exchange and other quoted companies.

The key areas affected by these additional rules are considered inthe following checklist.

When can employee share rights be granted, exercised or released?

There are restrictions on when share rights can be granted to, exercised, released or otherwise dealt with by directors and other persons who may have price-sensitive or other inside information and their relatives. Under the Listing Rules these people are called persons discharging managerial responsibilities (PDMRs). Under the AIM Rules they are called applicable employees.

Normally the restrictions apply during a close period. This is the period of 2 months before the announcement of final and interim results for a fully listed company or the publication of results for an AIM company. If the company announces quarterly then this is reduced to 1 month. It will also be whenever there is price-sensitive information not inthe public domain.

The relevant rules give exemptions, eg for hardship, but there are differences between the two sets of rules. For example, there is an automatic exemption

Access this article and thousands of others like it
free for 7 days with a trial of TolleyGuidance.

Think Tax.
Think Tolley.

Critical, comprehensive and up-to-date tax information

TAKE A FREE TRIAL

Popular Articles

Subsistence expenses

IntroductionSubsistence is the amount incurred as a consequence of business travel. Typically it relates to accommodation and meal costs incurred. These amounts are allowed because they are associated with the necessary travel. See the Travel expenses guidance note for more information of when

05 Ιαν 2022 14:31 | Produced by Tolley in association with Philip Rutherford Read more Read more

Taxation of loan relationships

The vast majority of companies will have loan relationships and so will need to consider how they are taxed under the loan relationship rules. There are also specific provisions dealing with relevant non-lending relationships and other deemed loan relationships. Companies are generally taxable on

17 Νοε 2021 13:51 | Produced by Tolley Read more Read more

Research and development expenditure credit (RDEC)

RDEC ― large company R&D reliefSince 1 April 2016, or from 1 April 2013 by election, large company R&D relief is given through research and development expenditure credits (RDEC), which is a taxable credit payable to the company. As the credit is taxable, it is also sometimes called an above the

16 Δεκ 2021 14:20 | Produced by Tolley Read more Read more