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Topical discussions about employee ownership and employee share plans

One of the first questions we often get from business owners looking into potentially selling their company to an Employee Ownership Trust, or EOT, is how is the sale financed? This is an important question, as often the vendor is also looking at a third-party...

Traditionally, as the year ends, RM2 takes a look at the highlights of the year in share schemes. This year, we thought we’d break with tradition and focus on the most important highlight – our clients. We are lucky enough to work with a huge variety of...

Some of the details needed in an EMI option agreement are self-explanatory – typically, these details include the number of options granted, the date of grant, and the name of the optionholder. HMRC’s website has a useful summary here: EMI options - terms to be included. It’s...

The number of Employee Ownership Trusts has increased to more than 150, according to the latest results from the national survey of EOTs, compiled by RM2 for the Employee Ownership Association. The current rate of growth in EOTs is 50% per annum, reflecting keen interest from...

It is noticeable that, while almost all the tax-advantaged share plans (CSOP, SIP and SAYE) and “Employee Ownership Trust” (EOT) arrangements make reference to “trading activities” (in the context of the scope of appropriate activities of a relevant company), it is only the Enterprise Management...

This part of the series looks at dilution, or rather protecting specific groups from dilution. You can set up an employee share scheme to protect specific groups from dilution, but I'll explain below why keeping things simple (and not offering dilution protection to employee shareholders)...

Worry about what happens to an employee's options or shares when they leave can often lead to unnecessary complexity. This is the second in a series of posts looking at some of the common barriers to a simple employee share scheme. Why is it hard to keep...

I love simple share scheme designs – they’re easier to manage, easier to explain to participants and more reliably produce the intended outcome. Why is it hard to keep it simple? Keeping it simple isn’t easy – the government already throws enough complexity at businesses in the...

It has always been the case that all UK trusts must be registered with HMRC. The registration must be made by 5th October following the tax year in which the trust was established. Up until recent times the completion of a paper form 41g would suffice...

Many of our private company clients operate Employee Benefit Trusts (EBTs) as these can be a very useful way of warehousing shares for use in employee share schemes. An EBT can also provide an internal marketplace, particularly for leavers to sell shares back to the...

During April this year, HM Revenue and Customs (“HMRC”) updated their guidance about errors made in online notifications of the grant of an Enterprise Management Incentive (“EMI”) option. It transpires (quite astonishingly in my personal view) that the Employment Related Securities (“ERS”) online system will not...

Flexible share plans Many private companies are keen to implement a flexible employee share scheme and will frequently choose a discretionary scheme such as Enterprise Management Incentives (EMI) or Company Share Option Plan (CSOP). These schemes allow the directors to choose the individuals who will benefit under...

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...