Employee Share Schemes

Employee share schemes are one way that companies can provide rewards to employees that are linked directly to the long-term financial success of the business without the tax and other risks that can arise from the employees directly holding shares.

A range of tax efficient schemes are available to employers. One of the most popular is the enterprise management incentive (‘EMI’) scheme. Provided it is correctly set up and complies with the legal requirements there is no tax on the grant of options to employees, and no tax on the exercise of the option. Shares acquired as a result of the exercise will be subject to capital gains tax, not income tax.

We assist our clients with structuring, implementing and winding down employee share schemes. Services include:

  • advising employers on the establishment of new schemes, including EMI schemes, company share option plans and employee benefit trusts
  • advising employees on the effect of schemes and on exit situations
  • transactions - advising on the ways to deal with existing schemes on a sale, listing or management buyout.