Hi there. The intention from the Swedes is to give them at zero cost (they would like to get us more 'vested' in their startup) so the principle is to minimise the cost to us where taxes are concerned.
With regards ***** ***** the shares in the future, we would need to offer them to the fellow shareholders first (right of first refusal) and they would buy them at an internally negotiated fair market value. If the internal negotiations fail then we appoint an independent valuer such as a credible management accountancy firm.
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Thank you for the information. I have a few more questions:
1. Does this apply even if the shares are from a privately held Swedish company?
2. Do I have to pay any tax today for receiving the shares, and if so, what is the best way to declare them.
3. How do things like 431 and 425 Elections play into this? I had a similar setup a few years ago with a UK company and signed a 431 election in order to take advantage of certain tax efficiencies but to be honest I can;t remember what they were.
4. Should the Swedish company be setting these up in a certain way, such as a formal share scheme as outlined on the gov.uk site, such as an EMI? Can they even do that?
EMIs are tax advantaged share options. They are designed to help small, higher risk companies recruit and retain employees who have the skills to help them grow and succeed. They are also a way of rewarding employees for taking a risk by investing their time and skills to help small companies achieve their potential.