Changes announced in the Budget to the rules for entrepreneurs’ relief and their impact on employee incentives Entrepreneurs’ relief reduces the rate of capital gains tax from 20% to 10% on the first £10 million of an individual’s qualifying lifetime gains. It is available on the disposal of shares in a trading company (or shares…

October 30, 2018 Read more >

In last month’s newsletter, we explained why the Inclusive Ownership Fund (IOF), proposed in the September 2018 Labour Party Conference, may not be the best method of enabling workers to share in the wealth they create.  We agree wholeheartedly that employee ownership can help increase a company’s productivity and encourage employees to identify more closely…

October 23, 2018 Read more >

Value Creation Plans – genuine attempts at designing executive LTIPs or too complex to explain? Some years ago, I attended the AGM of one of the UK’s biggest supermarkets. A shareholder asked a question about the proposed new executive LTIP. After a pause, one of the non-executives stood up and replied “it is too complex…

October 23, 2018 Read more >

How do not-for-profits design their long-term incentives? MM&K investigated the LTIP policies for 59 of the largest not-for-profit organisations to answer this question. Our sample consists of Charities, Housing Associations, Co-operatives, Building Societies, Mutual Insurance companies and Education Establishments (Universities and College Groups). It is important to note that the vast majority of these organisations…

October 18, 2018 Read more >

When is an employees’ share scheme not an employees’ share scheme? The answer is: when it’s an Inclusive Ownership Fund (IOF). Few would disagree that an engaged workforce delivers greater productivity or that offering shares to employees creates direct engagement with the financial and economic performance of the business. But proposals announced at the Labour…

September 27, 2018 Read more >

Malus and LTIP awards The UK Corporate Governance Code states that long-term incentive plans (LTIPs) must include provisions to enable the company to withhold payments to participants in specified circumstances. It is now common for LTIP Rules to allow the Remuneration Committee to apply these ‘malus’ provisions and also to ‘claw back’ the benefit of…

June 5, 2018 Read more >

Share plan annual returns deadline Annual share plan returns for the tax year ended 5 April 2018 must be submitted online to HMRC no later than 6 July 2018. Returns must be made for the tax-advantaged share plans – SIP, SAYE, CSOP and EMI – and also for unapproved share plans. Items to be reported…

June 1, 2018 Read more >

SAYE permitted missed contributions extended from six to 12 The regulations for Save-As-You-Earn/Sharesave share option schemes allow employees to miss up to six monthly contributions. These contributions can be made up in later months and the bonus date, when options become exercisable, is delayed accordingly. From 1 September 2018, this maximum ‘savings holiday’ is to…

May 30, 2018 Read more >

GDPR and share plans – update As you will be aware from the numerous emails you have received on the subject, the EU General Data Protection Regulation (GDPR) came into effect on 25 May 2018. The Directive has consequences for how data about employees are handled by companies and their agents. One implication which has…

May 25, 2018 Read more >

EMI tax relief extended Enterprise Management Incentives (EMI) are tax-advantaged arrangements for granting share options to employees of smaller companies, with gross assets of no more than £30 million and fewer than 250 employees. European Union (EU) State Aid approval for EMI expired on 6 April 2018 and there was concern that income tax and…

May 15, 2018 Read more >

Grant of EMI Option: current status In the ERS Bulletin #27 published on 4 April 2018, HMRC had stated that following the expiration of the EU State Aid approval for Enterprise Management Incentives (“EMI”) on 6 April 2018, EMI options granted in the period from 7 April 2018 until EU State Aid approval is received…

April 25, 2018 Read more >

GDPR and Share Plans The EU General Data Protection Regulation (GDPR) is due to come into effect on 25 May 2018. The Directive may potentially have consequences for how data about employees are handled by companies and their agents. One implication which has not so far been widely publicised is that amendments may be need…

March 21, 2018 Read more >