Topical discussions about employee ownership and employee share plans
There has been a slew of entrepreneurs’ relief (ER) cases lately as ER comes under increasing scrutiny in view of the tax lost to HM Treasury. (To recap, ER is a capital gains tax relief which taxes an individual’s qualifying total lifetime gains of £10m...
Amazingly, 28 June 2019 will be the seventh Employee Ownership Day – the first was celebrated on 4 July 2013. Employee ownership has really come on in leaps and bounds in recent years. It’s estimated that there are now around 350 employee owned businesses in the...
Taxation of share options In 2003, employment related shares and share options were made subject to wide sweeping reforms, specifically introduced to address tax avoidance. One such change was the introduction of a law that stated where an option to acquire shares is made available by...
Many private companies implement Enterprise Management Incentive ("EMI") share options (and other types of share plan) with the specific intention of sharing sale proceeds with employees if the company is ever sold. Selling a company can be a stressful time for company owners, with acquirers...
In Hunt v HMRC [2019] UKFTT 0210 (TC) (26 March 2019) (Judge Anne Redston), the First Tier Tribunal upheld a decision regarding one of the key tests for Entrepreneurs’ Relief (ER). To recap, at the time of this particular claim, ER secured a 10% capital...
The recent case of Nosworthy v Instinctif Partners Ltd (2019) UKEAT/0100/18 is not strictly speaking a case regarding employee share schemes but a couple of the themes are pertinent to our arena, particularly where employees have acquired shares following the exercise of share options, or...
On the occasion of its 25th birthday, RM2, the market leading employee share schemes and EOT consulting business, is converting to full employee ownership as the present owners transfer their entire shareholding to an Employee Ownership Trust. Since 1994, RM2 has helped private companies set up...
The symposium is an annual opportunity for share scheme experts to share ideas, celebrate employee share schemes and (in the friendliest way) occasionally butt heads.I was fascinated to see three themes emerge from this years’ talks:Are employee share schemes a mere financial incentive or a...
Approaching the end of the tax year in the world of share plans is a bit like Christmas, there are 2 types of shopper, those who buy their presents in good time, and those who rush out on Christmas Eve. RM2 are definatley in the former...
On 14 February 2019, one of our directors Nigel Mason spoke with Deb Oxley OBE, chief executive of the Employee Ownership Association ("EOA"), at the annual Jack Fitzpatrick Memorial Lecture in Dublin, organised by IPSA, the Irish Proshare Association. Jack Fitzpatrick was a lifelong advocate...
At RM2 we have occasionally had cause to wonder whether HM Revenue & Customs (“HMRC”) actually read the Enterprise Management Incentive valuation submissions that we make on behalf of clients.We are, of course, aware that HMRC view Enterprise Management Incentive (“EMI”) valuations as low risk (and...
Zero tax on an employee share plan, the Share Incentive Plan ("SIP") sounds too good to be true. Even the Enterprise Management Incentive ("EMI") only delivers a 10% capital gains tax rate to participants – and that’s after employees have paid something to exercise their...
Discretionary share schemes Enterprise Management Incentive (EMI) and Company Share Option Plan (CSOP) options are popular choices for companies who want to operate their share option arrangements flexibly. Both plans allow the directors an element of choice and discretion in key areas: Who gets to benefit ...
Each year the Employment Related Securities (“ERS”) service of HMRC issues penalties for share scheme returns not filed by the deadline date of 6th July. HMRC released the following statistics on the number of penalties issued for 2017/2018 tax year: 9,253 first penalties issued (£100...
On 28th November 2018, the Investment Association (“IA”) published a revised version of its principles of remuneration. The main changes are: Firstly, a recommendation of a minimum two-year period during which executives are required to hold their shares post any termination of their employment that may have...
