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is there a way of issuing shares to an employee without the

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is there a way of issuing shares to an employee without the employee incurring immediate income tax liability? we do not want to issue options just outright shares. I understand there are share incentive plans which allow up to £9,000 of shares to be issued with no income tax. Is there any other methods? thanks
and thank you me to assist you.
There a few ways that you can give shares to an employee. They have different tax situations.
1)If you give shares through a Share Incentive Plan (SIP) and the employee keeps them in the plan years they won’t pay Income Tax or National Insurance on their value.
You can give the employee up to £3,600 of free shares in any tax year.
2)The employee can buy shares out of their salary before tax deductions. There’s a limit to how much they can spend - either £1,800 or 10% of their income tax year, whichever is lower. You can can give them up to 2 free matching shares partnership share they buy.
They can buy more with the dividends. They won’t pay Income Tax if they keep the dividend shares least 3 years.
3)The Company Share Option Plan lets you give them the option to buy up to £30,000 worth of shares at a fixed price.
The employee won’t pay Income Tax or National Insurance contributions on the difference between what they pay shares and what they’re actually worth. Of course when they sell they will have CGT.
4)If the company has assets of £30 million or less, you may be able to offer Enterprise Management Incentives (EMIs). This is a buying option too though so you may not want to use it. The employee can buy shares of up to £250,000 without paying Income Tax or National Insurance on the difference between what they pay shares and what they’re actually worth.
As you can see there are many ways employee to receive shares.
Shares offered outside of these schemes won’t have the same tax advantages NI and tax.
Customer: replied 3 years ago.

, thank you reply. However, in my question I stated that I already knew about share incentive plans and I did not want to issue share options so most of your answer has repeated what I did not request.

The company has assets of more than £30m so the EMI is not relevant.

I need to find a way of just issuing shares to employees. is there a way of doing this though trusts? or offshore schemes? it needs to be more creative than the text book ideas which I have already found anyway.

appreciate your help if you can provide this.



You could have an employee benefit trust and that could be offshore but the shares are not directly owned by the employee.
HMRC has anti-avoidance legislation so that out right gifting of shares is not really a legal option.
If gift the shares and do not expect the employee to pay anything shares (except the nominal par value which is required) you will need to provide the employee with the cash required to pay the tax bill and this will be a payroll cost.
You could give the employee a bonus which is applied in satisfaction of the tax liability.
Bonus payments do attract PAYE and NI but you would have a claim to corporation tax.
Customer: replied 3 years ago.

thanks reply, please could you explain then the consequences of the employee benefit trust and how that would work to be able to issue shares?



First you need to know how HMRC views these:
HM Revenue and Customs state that when forming an EBT scheme, you must AVOID the following:
Payment of bonuses via an offshore trust.
Payment of remuneration by way of loans, which may be written off before they become repayable.
Create an offshore ‘moneybox’ / shareholders of close companies.
Allowing employees to use assets (such as cars) owned by the EBT, the costs of acquiring which would be capital expenditure if they were owned by the employing company.
Providing benefits in the form of shares (not in the employing company) whose values can be most easily manipulated before or after they are transferred from the EBT to employees or directors.
Assets committed to the EBT (in this case shares) are done so benefit of all past and current employees, with no specific employees having rights over the assets. This is why I said the employee does not actually own the shares. The employee is taxed ( via PAYE) upon receipt of the asset distributed by the trust.
You asked less then text book option and that is one butyou would be advised to seek additional advise and guidance from your own solicitor.
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