Your Options
Share Plans
Below provides an overview of the Employee Share Plans we manage on behalf of many leading UK companies.
Sharesave
Sharesave is a savings vehicle for employees of companies which operate savings related share option schemes that are HM Revenue & Customs approved to a model set by the Treasury.
The company offers its employees the option to buy shares in the company at a future date. The option may be granted at a discount of up to 20% of the current share price.
The employee then saves between £5 and £250 per month out of net pay on a 3 or 5 years saving contract. The 7 year contract allows savings for 5 years then the employee leaves the contributions in for a further 2 years. When the contract matures, a tax free bonus is received. The employee can then choose either to exercise the option to buy the shares with the proceeds from the savings contract (there is no obligation to purchase), or just to take the proceeds and the bonus.
The bonuses are equivalent to a fixed rate of interest and are set by Her Majesty's Treasury. No Income Tax or National Insurance Contributions are incurred on the granting or exercising - there can be an Income Tax charge on exercise if this occurs within 3 years of grant in circumstances other than redundancy, retirement, injury, disability or death - of options.
What is the Share Incentive Plan?
The Share Incentive Plan was introduced in the Finance Act 2000. HM Revenue have given companies the flexibility to have varying plan designs to suit the individual objectives unique to each company. That's because unlike the traditional employee share plans, Share Incentive Plans have flexibility as part of their design brief. This re-enforces the need to understand what you want from the plan from the beginning.
The Share Incentive Plan more commonly referred to as the SIP, can offer a combination of four types of shares, these being free, partnership, matching and dividend shares.
How your SIP works is determined by what suits your company best. For example, your company can offer all, or a combination of the above share types and on a variety of frequencies. The plan design can change year on year to meet the differing needs of your company objectives.
Global Share Plans
Global Share Plans replicate the mechanics of a traditional UK plans and are offered to employees across the company regardless of the jurisdiction in which they work. They form part of a companies overall remuneration strategy to align benefits across the Group and can either be approved plans that maximise the tax legislation in each country or unapproved plans that mirror a plan already in existence. For example, if you offer the approved Sharesave plan to employees in the UK you may wish to take this model and cascade to your employees on an unapproved basis to your overseas subsidiaries.
Below provides an overview of the Employee Share Plans we manage on behalf of many leading UK companies.
Sharesave
Sharesave is a savings vehicle for employees of companies which operate savings related share option schemes that are HM Revenue & Customs approved to a model set by the Treasury.
The company offers its employees the option to buy shares in the company at a future date. The option may be granted at a discount of up to 20% of the current share price.
The employee then saves between £5 and £250 per month out of net pay on a 3 or 5 years saving contract. The 7 year contract allows savings for 5 years then the employee leaves the contributions in for a further 2 years. When the contract matures, a tax free bonus is received. The employee can then choose either to exercise the option to buy the shares with the proceeds from the savings contract (there is no obligation to purchase), or just to take the proceeds and the bonus.
The bonuses are equivalent to a fixed rate of interest and are set by Her Majesty's Treasury. No Income Tax or National Insurance Contributions are incurred on the granting or exercising - there can be an Income Tax charge on exercise if this occurs within 3 years of grant in circumstances other than redundancy, retirement, injury, disability or death - of options.
What is the Share Incentive Plan?
The Share Incentive Plan was introduced in the Finance Act 2000. HM Revenue have given companies the flexibility to have varying plan designs to suit the individual objectives unique to each company. That's because unlike the traditional employee share plans, Share Incentive Plans have flexibility as part of their design brief. This re-enforces the need to understand what you want from the plan from the beginning.
The Share Incentive Plan more commonly referred to as the SIP, can offer a combination of four types of shares, these being free, partnership, matching and dividend shares.
How your SIP works is determined by what suits your company best. For example, your company can offer all, or a combination of the above share types and on a variety of frequencies. The plan design can change year on year to meet the differing needs of your company objectives.
Global Share Plans
Global Share Plans replicate the mechanics of a traditional UK plans and are offered to employees across the company regardless of the jurisdiction in which they work. They form part of a companies overall remuneration strategy to align benefits across the Group and can either be approved plans that maximise the tax legislation in each country or unapproved plans that mirror a plan already in existence. For example, if you offer the approved Sharesave plan to employees in the UK you may wish to take this model and cascade to your employees on an unapproved basis to your overseas subsidiaries.
