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012-068 - Employee Share Schemes

Employee shares scheme were introduced as a form of incentive to encourage employees to become more proactive in their workplace and look towards increasing the overall productivity of their employer as well as to reward them for their efforts at making a business profitable.  Traditionally, th ...Read more
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Employee shares scheme were introduced as a form of incentive to encourage employees to become more proactive in their workplace and look towards increasing the overall productivity of their employer as well as to reward them for their efforts at making a business profitable.  Traditionally, the employer would encourage their employees to participate in an Employee Share Scheme by offering employees discounted shares or rights (including options) to acquire them.  For the 2010 income tax year and onwards, there will be two different taxing regimes for Employee Share Schemes which will be determined by when the share scheme was introduced to the employees.

This paper is presented under the following headings:

  • Taxation of Employee Shares
  • Taxation Of Employee Share Schemes In Effect Before 1st July 2009
  • Qualification Rules
  • Where The Scheme Does Not Qualify
  • Where The Scheme Does Qualify
  • Taxation Of Employee Share Schemes In Effect After 1 July 2009
  • Upfront Taxation
  • Deferred Taxation
  • Risk of Forfeiture
  • Eligibility For Deferred Taxation
  • Deferred Taxing Point