If you are considering the introduction, or extension, of employee share incentives, now is a good time to implement your plans.
Generally, participation has to be based on the market value of the shares if potential adverse income tax and national insurance consequences are to be avoided. The valuation of the relatively small percentages of equity which are involved in share schemes is based on historic data. Given the effect of the economic crisis, valuations are likely to be relatively low but they will progressively increase as the impact of the UK’s continued economic recovery feeds through to the bottom line. The value of share incentives can therefore be maximised by entering into them sooner rather than later.
- Enterprise Management Incentive (EMI)
- Company Share Option Plan (CSOP)
- Employee – Ownership trusts and tax free bonuses