Topical discussions about employee ownership and employee share plans
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...
When a company becomes a subsidiary of another company, it clearly loses its independence – this is a fundamental test for any company that wishes to grant EMI options. However, the EMI independence test is much broader than just looking at share capital ownership. An EMI...
A Conservative government has the following key policies that may affect your plans on share schemes and remuneration generally: Increasing the tax-free personal allowance to £12,500 and the higher rate threshold to £50,000; Increasing the charge on “non-doms” and tackling abuses of the of the...
For many modern UK employers considering how to attract and retain talent in competitive marketplaces and how to secure the best performance, the option of Employee Ownership is a definite consideration. Research consistently shows that Employee Ownership (EO) is an excellent way to increase engagement,...
If you, or one of your clients, operates an employee share scheme, it MUST be registered on HMRC’s new online Employment Related Securities portal by 6th July this year. This applies to ANY scheme, whether you have just implemented it, or whether it has been operating...
One of the tests for a company to qualify for EMI share schemes is that it is not “a 51% subsidiary” of another company – i.e. no more than 50% of the company’s share capital is owned directly or indirectly by another company. This test...
If any of your clients have UK taxpayer employees receiving share/stock options, restricted share units or other employee share benefits, the plan or agreement must be registered with HM Revenue & Customs (HMRC) online preferably before 6th April 2015, and then an online (not paper)...
Ensuring the implementation of any employee share scheme is an essential component in its success. However, taking care to ensure the administration is permitted the same level of detail is also of paramount importance. Errors in scheme administration can expose an organisation to significant financial risk,...
