SHARES & EQUITY INCENTIVES
The taxes surrounding the very essence of a company, its share capital, are often key to many different aspects of a company’s life, from raising capital to recruitment and incentivisation of key staff through to planning for succession or sale.
Although the rules surrounding raising capital can be complicated, the very significant tax reliefs available to investors and business angels under the Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS) can greatly enhance the capital raising ability of small and medium sized businesses. Our team has many years of collective experience navigating the pitfalls and can help you and your clients successfully claim these valuable tax savings.
It is common for employees and directors to hold shares in their employing company. This could be because the business is under employee ownership or they are one of the main managers of the business through to it being a reward or incentive for service.
We can help with recruitment, staff retention and motivation of key staff and maximise value for shareholders. Our team brings more than simply taxation experience, it includes specialist reward advisers, ensuring focus on the commercial and corporate governance aspects of incentive plan design that are key to success.
There are complex tax rules that can apply around acquiring, holding and disposing of shares in your employing company that apply to directors and therefore encompass not only professional management, but also owner managers.
There are many tax anti-avoidance provisions that can lead to employment tax and National Insurance charges, there are also Capital Gains Tax, Corporation Tax, Inheritance Tax and Stamp Duty impications to consider. These can impact both the individual directors/shareholders, and the employing company. These charges can come as a substantial shock, leading to high rates of employment tax on a potentially significant percentage of a company’s value, particularly on sale.
At Francis Clart Tax Consultancy we have technical specialists who can advise on such transactions and assist in navigating this complex and high value area of tax.
Further details on areas of share plans and equity inventives which our experts can advise you on can be found below, however if you would like to discuss any of these aspects further please get in touch with Martin Brown.
Corporate Succession Planning
- Management Buyouts (MBOs)
- Family business transfers
- Employee ownership
- Corporate reconstructions and share roll overs
- Venture Capital/Private Equity deal structures.
- Advising management teams and owners on the Capital Gains Tax, employment tax, Corporation Tax and Stamp Duty implications of business transfers.
Tax Efficient Investment Schemes
- Advising on the qualifying conditions for Enterprise Investment Schemes (EIS) and Seed Enterprise Investment Schemes (SEIS)
- Obtaining clearances of qualifying status
Share and Incentive Plan Design and Implementation
- Corporate governance and commercial aspects of long term management incentive plan design
- Pay and reward advice, in particular directors’ pay and remuneration
- Structuring employee share acquisition and incentive arrangements, including:
- Enterprise Management Incentives (EMI)
- Company Share Option Plans (CSOP)
- Growth share plans
- Deferred purchase plans
- All employee reward arrangements (SAYE and SIP)
- Unapproved Option plans
- Other long term incentives (LTIPs)
- International share plan design and operation across multiple jurisdictions
- Employee Benefit Trusts (EBT)
- Stock awards, including restricted stock and exercising stock options
- Employee Stock Purchase Plans (ESPPs)
- Other benefits arrangements
Tax Valuation of Shares
- Preparation of professional option on the valuation of shares for tax purposes
- Valuation of growth shares
- Negotiation with HMRC Shares and Assets Valuation on share values
We can help with all aspects of tax compiance in relation to share awards, including:
- Corporation Tax, Self Assessment, PAYE and NIC compliance on share awards including dealing with HMRC enquiries
- Preparation and submission of the annual share plan returns
- Complex multi-jurisdiction share plan operation and the taxation of awards for internationally mobile participants.