We have in-house tax expertise to advise on establishing bespoke equity reward schemes for our clients and act as Professional Trustee for approved and non-approved schemes and administer them on behalf of our clients and their employees.
The employees are highly motivated by incentive plans which allow them to participate in the growth of their company. The receipt of share benefits is often linked to individual performance targets and can have a major impact on productivity and growth.
Employee Benefit Trusts (EBTs)
An EBT is a vehicle commonly used to administer employee share plans. Shares are transferred to the EBT for future allocation to employees under a particular scheme. Such share-based schemes have generally not been affected by anti-avoidance legislation.
We have experience in implementing and administering EBTs through the provision of professional trustee and administrative services.
Approved Share Option Schemes
“Approved” schemes enable employees to be granted share options with a favoured tax treatment. The growth in the value of the shares between grant and exercise is subject to capital gains tax at a lower rate than the normal combined income tax and national insurance charges.
By far the most popular approved scheme for growing businesses is the EMI. A key benefit of the EMI is the ability to choose which employees may participate and to build in individual performance criteria governing the exercise of options. This feature means that these schemes are particularly suited for rewarding key management. The schemes are often administered through an EBT.
We also advise on SIP and SAYE plans. These schemes provide an incentive to the wider workforce and might be used to reward junior employees in conjunction with a separate scheme for key management.
