The following Employment Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
Share Incentive Plans (SIPs), originally known as ‘All Employee Share Ownership Plans’, were introduced at the same time as EMI. Since their introduction, the underlying rules and conditions have remained broadly the same, although in recent years various recommendations made by the Office of Tax Simplification (OTS) have led to the removal of some unnecessary anomalies between SIPs and other tax-advantaged share schemes. Also, an SIP was originally one of the three types of tax-advantaged share scheme that required HMRC approval (the others being CSOPs and SAYE option schemes). From 2014/15 onwards the requirement for HMRC approval has been replaced with a system of self-certification. Existing approved schemes had to re-register with HMRC and self-certify to retain the tax advantages of the SIP uninterrupted.
Due to the need to use a separate trust, the relative complexity of the arrangements and administration, as well as the requirement broadly to offer similar share rights to all employees, SIPs have almost exclusively been utilised by large, publicly quoted companies.
The SIP legislation is contained in ITEPA 2003, ss 488–515 and Sch 2. Further provisions are included in ITTOIA 2005, ss 382, 384–385, 392–396, 402–408 and 770.
HMRC has a section of its Employee Tax Advantaged Share Schemes User Manual dedicated to the subject which can be found at ETASSUM20000 onwards.
The trust must be constituted under UK law and all trustees must be resident in the UK. In addition, there is a legislative requirement that the trust instrument does not contain any terms that are neither essential nor reasonably incidental to compliance with legislation.
As a result, a separate trust is usually needed to operate these plans. This is a drawback, since many companies may have existing employee benefit or employee share trusts they could easily utilise for this purpose but are not permitted to.
Before introducing an SIP scheme it was, up to and including 2013/14, necessary to get HMRC approval to the terms of the plan and also
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
The substantial shareholding exemption (SSE) provides a complete exemption from the liability to corporation tax on the gains generated from qualifying disposals of shares and interests in shares by qualifying companies. Conversely, if losses are generated by the disposal and the SSE conditions are
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
This note offers guidance in respect of the administration of company tax returns. If a company or organisation is subject to corporation tax they will have to complete and file a company tax return for each accounting period. A company or organisation must, in the main, file a return even if they
Maintenance payments are payments made by a taxpayer to their former or separated spouse for the maintenance of that former spouse or their children. To obtain any tax relief for maintenance payments, one of the couple must have been born before 5 April 1935 and the payments must be made by virtue
To view our latest tax guidance content, sign in to Tolley Guidance or register for a free trial.