When share plans go wrong – your 5 step guide to keep share schemes safe

Last Updated on 28 January 2026

Recent press reports on some disgruntled former Revolut employees demonstrate the importance of getting share plan arrangements right, particularly in private companies.

Without going into any great detail, it appears that the company operated a tax advantaged Company Share Option Plan (CSOP).   A CSOP should result in participants being charged capital gains tax (CGT) rather than income tax (and potential NICs) on any gains when the shares are sold.

The difficulty seems to have arisen because certain ex-employees of the company had retained CSOP options after their employment ended.  Under CSOP, the tax advantages will usually fall away for ex-employees, unless the employee left for “good leaver” and then options must be exercised within specific time limits.  Importantly, good leaver reasons are set out specifically in the legislation

For whatever reason, the ex-employees were expecting a CGT charge when they sold their shares, but instead they were hit with a surprising and unwelcome income tax bill.  The fallout was widely reported in the financial press – not an ideal scenario.

Private companies with share plans of any type can take away some lessons from this:

• Think about leavers.  Some private companies are happy to let ex-employees retain options and shares, but it’s often sensible to arrange for leavers’ options to lapse, or for there to be arrangements to buy leavers’ shares back.
• Understand the plan rules.  Some share plans, like CSOP, carry excellent tax advantages, but these can be easily lost in certain circumstances.  Always take advice – at grant, at exercise or on corporate events.
• Clear communication.  It’s not always possible to communicate to employees the exact impact of every single scenario for them from a tax perspective.  However, you should let them know the key events in which the tax situation might change – check that these are correct with your share plan adviser.
• Don’t overpromise.  It’s important to make sure you don’t make definitive promises to employees about what their tax or financial outcome will be.  This may change not just because of corporate events, or due to legislative changes, but also as a result of the employee’s own personal tax position.  Remember  – the value of your shares can go down as well as up and tax rules change!
• Review your plan.  One plan might work very well for your company at start up but as the business changes you may well need to update it to align with new corporate objectives.  Sometimes there are legislative changes that sneak through and can impact your plan.  A regular MOT of your share plan is good practice.

RM2 has nearly 30 years’ experience advising private companies on the design, implementation and ongoing compliance of a variety of share schemes, so we’re in a very good place to help advise, review and – if necessary – correct share plan arrangements.

If you’re concerned about whether your share plan is working correctly, or you think your arrangements might benefit from a review, please contact us on enquiries@rm2.co.uk and ask to speak to one of our advisors.