Offering a stake in the business can help you attract and retain the best talent and develop committed and incentivised staff.
There are many ways to achieve this including share and reward plans that qualify for tax reliefs.
It can be hard to decide what is best for your company. Is your current plan still competitive and effective, taking account of current tax rules, coronavirus, Brexit and other changes?
RSM’s experienced share scheme professionals have worked on hundreds of schemes. We will listen and understand your business and its needs. Our wealth of experience enables you to deliver exactly the right type of scheme – considering your business size, aspirations and objectives.
The following table and key explain the types of scheme that are available, and the kinds of scenario that they can be suitable for.
| Key issues | Type of scheme |
|---|---|
| The company is not under the control (<50%) of any other company | EMI, SIP, SAYE, EOT, CSOP, USOP, PPS, Growth, LTIP |
| The company is under the control (>50%) of another company | USOP, PPS, Growth, LTIP |
| Discretion to benefit one or more employees | EMI, CSOP, PPS, Growth, LTIP |
| Participation offered to all employees | SIP, SAYE, EOT, EMI, CSOP, USOP |
| Participation offered to non-UK persons (subject to local laws and taxes) | USOP, PPS, Growth (possibly EMI, SAYE and EOT with adaptations), LTIP |
| Participation offered to non-executive directors, contractors and other non-employees | PPS, Growth, LTIP |
| Shares offered at a discount | EMI, SIP, SAYE, LTIP |
| Shares offered for free | SIP, EMI, LTIP |
| Simple and flexible | EMI, USOP |
| Most tax reliefs | EMI, SIP |
| Transfer to full employee ownership | Mostly EOT but could also have EMI, SIP and USOP |
| International employees | SAYE, SIP, USOP, EMI, LTIP |
| Key | |
|
CSOP |
Company Share Option Plan |
|
EMI |
Enterprise Management Incentive Scheme |
|
EOT |
Employee Ownership Trust |
|
Growth |
Growth shares |
|
LTIP |
Long-term incentive plan (broad term usually involving nil or nominal cost options, conditional or restricted shares and/or an employee benefit trust) |
|
PPS |
NII or partly paid shares |
|
SAYE |
Savings Related Share Option Plan |
|
SIP |
Share Incentive Plan |
|
USOP |
Unapproved Share Option Plan |
Find out more about the share schemes available:
- employee ownership trusts;
- enterprise management incentives share options; and
- share incentive plans.
To find out more about employee shares schemes and how we can help you with the tax and compliance aspects, please contact Fiona Bell, Simon Adams or Martin Cooper.
