Share and Share Option Planning

There are a number of tax-efficient HM Revenue & Customs (HMRC)-approved tax schemes available, which are designed to allow businesses to hold, retain and incentivise key members of staff, acting in effect like “golden handcuffs” by allowing them to participate in the success of the company going forward.

We work with clients and other professionals to provide a tailored advisory service including advising on the most appropriate type of scheme for a company to use, the implementation, dealing with HMRC and agreeing valuations and advising recipients of options of their rights and responsibilities under the scheme rules. The types of scheme available are:

  • Enterprise Management Incentive share options scheme (EMI)
  • This is the most beneficial scheme for key employees, allowing them – provided they have held the options or shares for 12 months prior to a subsequent sale of shares – to qualify for Entrepreneur’s Relief for capital gains tax purposes, resulting in only a 10 per cent tax rate on the gain. Effectively, an employee can receive options over up to £250,000 of shares and only pay a 10 per cent tax rate on the sale.

    In addition, the company receives a corporation tax deduction based on the difference between the price the shares are granted and the market value of those shares when the options are exercised. Many schemes are based on an “exit” only exercise, where the maximum benefit can be obtained for the company, enhancing value for the sellers and the purchaser alike.

  • Company Share Option Plans
  • This is a smaller scale, approved share incentive type scheme with many of the same advantages as EMI.

    Such schemes can be structured to suit the employer. Our share scheme experts can give you practical and cost-effective advice on which type of scheme might suit your company and how to implement your chosen scheme and manage the implementation. We also provide assistance in estimating and agreeing the valuation of the shares with HMRC.

  • Employee shareholder shares
  • HMRC has also introduced a new share scheme based on employees receiving a minimum of £2,000 of employee shares tax-free, in return for waiving part of their employment rights. The benefit of this type of scheme is that the shares when sold are capital gains tax-free and the employee is not taxed on the value of the shares when awarded.

  • Save As You Earn (SAYE) and Share Incentive Plans (SIP)
  • SAYE and SIP are also still available for larger companies to incentivise large groups of employees.

In addition to the approved schemes, we can provide advice on alternative unapproved share schemes, funded unapproved retirement benefit scheme (FURBS), straightforward share investments and Phantom share schemes (effectively a bonus scheme that provides a bonus as the value of the company increases).

Please contact Alastair Byrne on 01757 294959 or email him at to discuss our taxation services and how we can help you.

Our tax team

Alastair Byrne
Alastair Byrne