UK companies continue to seek a listing overseas or to de-list altogether but there are implications for UK participants in their share incentive schemes.

Amid rumours that Astrazeneca, which generates c.40% of its revenues in the USA, is considering switching its listing from London to New York and media comment on the collapse of the Government’s industrial policy, there is plenty to suggest that the London Stock Exchange is in for an uphill battle to attract new listings.

Whilst the grass may be greener on the other side, decisions by UK companies to list on an overseas exchange (favourites are NASDAQ or NYSE) or to forego their London listing to become private, have implications for UK participants in their share incentive plans. Here are five things to bear in mind when thinking about listing overseas or delisting:

1. Regulatory environment/market culture

Historically, US market culture, for example, has focused on long-term growth and buy-backs. Despite UK corporate governance codes pushing long-term sustainability and value-creation, UK institutions, particularly pension funds, have focused historically on dividends.

A different market culture can influence investor behaviour, share price performance and time-scales, which might not suit all businesses.

2. Dealing costs

IPO costs on overseas exchanges can be higher than in London. Issuers will be focused on listing costs on IPO and in relation to subsequent issues. Post-vesting, UK share plan participants will also be interested in the costs of trading their shares on an overseas exchange. Research into local market regulation, culture and dealing cost and clear communication to participants are essential to the success of any employee share plan linked to shares listed on an overseas exchange.

3. Currency exposure

As shares traded on an overseas exchange will be denominated in a currency other than GBP, an additional factor for UK participants to consider is the exchange rate between the local currency and GBP. Exchange rates fluctuate and can have a material effect on the expected value of shares subject to share options or other awards made under employees share plans. Currency conversion fees may increase share dealing costs and share plan administration fees.

 4. Absence of an open market

De-listed shares cease to be traded on a recognised stock exchange, which may have implications for taxation and valuations (see below). Whilst it may be possible to match buyers to sellers (through an employee benefit trust, for example) it may be difficult to buy or sell at a time or price of the buyer’s or seller’s choosing.

The absence of an open exchange means there will be no readily available open market price – just the price at which the most recent trade was done and that might be several weeks or months in the past. Employee share awards made by unlisted companies whose plan is to exit through a sale or (re-)listing can make awards designed to vest on exit, at which point the sale or IPO price sets the then market value. PISCES is a new secondary trading market for shares in unquoted companies Read more here about PISCES. The PISCES Regulations came into force on 5 June 2025 and established a five-year trial period. Subject to the regulations, employees in participating companies will be able to trade shares during periods and within disclosed price parameters set by those companies.

5. Taxation and valuations

A key practical point is that any employee income tax charge on gains from shares for which trading arrangements exist will be collected through the PAYE system. Both employees’ and employers’ NIC will also be payable. Trading arrangements include a listing and would likely also include a market made by an employee benefit trust or, presumably, PISCES.

Gains from shares for which there are no trading arrangements are collected through self-assessment and there are no NIC charges.

In connection with UK tax-advantaged share plans, it is important to be able to determine the award-date market value of the shares awarded because the tax advantages are subject to conditions, including limits on the market value of shares that may be awarded. For shares listed on a recognised stock exchange, which may include an overseas exchange, HMRC will normally accept the quoted market price of a share as its market value for tax purposes.

However, HMRC no longer provides advance agreement to the market value of shares in unquoted companies. That said, we advise unlisted firms that successfully operate tax-advantaged employee share schemes.

Whilst there may be good business reasons to list on an overseas stock exchange or to de-list from London, bearing in mind that value is created by people, it is important that the process does not diminish the cohesive power of share schemes.

Please contact paul.norris@mm-k.com with your thoughts or comments on this article.

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