As part of the Chancellor’s 2014 budget, a new form of Employee Benefit Trust was created: the Employee Ownership Trust. These trusts were created to help facilitate the creation of stable, long term, employee owned companies. To assist with this, the trusts benefit from two key...

The default tax position for employees acquiring shares in their employer is a charge to income tax. This surprises some employers who think that shares must be capital assets and therefore taxed more favourably than cash no matter how the shares are delivered to staff. RM2...

There have been bigger issues in the world this year than share schemes. Nonetheless, it’s been an exciting year for us at RM2. Here’s a look at the best (and worst) bits: January 2016 Back to work for our admin team. We file around 60 trust...

When designing and implementing an employee share scheme, the importance of a company secretary (or the person performing the duties of a company secretary) is vital and should not be underestimated. A Company Secretary and their role The role of a Company Secretary can incorporate all areas...

A question that has been raised with RM2 a number of times in the context of structuring vendor-funded Employee Ownership Trust (EOT) transactions is whether the better structure for a vendor would be for the vendor as part of their consideration (i.e. the purchase price)...

Hopefully that headline has grabbed your attention, because for some this is a controversial topic. Clearly, the aim of the Employee Ownership Trust (EOT) legislation is to encourage more broad-based employee trust ownership of UK businesses, and with that normally comes a healthy injection of employee...

When submitting an Enterprise Management Incentive (EMI) valuation to HMRC for comment, a VAL231 form must be included with your submission. The form includes information like the company name, agent details, proposed values and number of share being offered under option. To date the form...

The need for guiding principles It’s easy to get lost in the complexity of regulations and tax rules around employee share schemes. There are no clearly, readily understandable principles or policy objectives defined in the regulations themselves. Instead, the regulations and tax rules are the result...

One question that comes up fairly often when speaking with clients regarding succession planning is whether an Employee Benefit Trust (EBT) or Employee Ownership Trust (EOT) is the better option if shareholders want to incorporate employee ownership in their succession planning process. The answer...

Administering a Share Incentive Plan (SIP) is easy, isn’t it? It can be done in house, can’t it? Like most things, the answer is yes, but only if you know what you are doing! A client recently asked us to help remedy some issues they had...

Once a shareholder has decided to sell to an Employee Ownership Trust (EOT), how to finance the transaction is the next important question: In this discussion, we will assume a business is being sold for 5.0x EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation, or operating...

This blog is the next instalment in our Corporate Finance series; regarding the use of an Employee Ownership Trust (EOT) in change-of-control transactions. As we mentioned in our previous entry, the sale of a business to an EOT is a viable alternative to a third-party...

Companies that operate EMI options, and employees participating in EMI schemes, benefit from significant tax reliefs. However, companies should be aware that there are a number of events that can cause the options to become disqualified, resulting in a potential loss of the tax reliefs. Tax...

This blog has been reproduced with the kind permission of Jeremy Glover of Jurit Law. Employee Benefit Trusts are constantly under attack by HMRC. Many are restricted in their operation as a result of Part 7A Income Tax (Earnings and Pensions) Act 2003 in that many...

Did you put in place a great share scheme this year? Did you take an existing share scheme and revive and enliven it? Did your share scheme sparkle and delight? Were your communications innovative, imaginative, pro-active and - crucially - did they...