Employment Related Securities and Unlisted Companies

Employment Related Securities and Unlisted Companies

Fourth Edition

Employment-Related Securities and Unlisted Companies is written with mainly private or unlisted companies in mind and explains in depth how the employment related securities (‘ERS’) rules in ITEPA 2003, Part 7 apply to employee share acquisitions generally, including:

  • Securities as earnings
  • Restricted or convertible securities
  • Securities acquired for less than market value
  • Securities disposed of for more than their market value
  • Post-acquisition benefits connected with securities
  • Securities acquired under options

The book also explores employee share acquisitions through various means, the relevant capital gains tax rules and corporation tax relief for employee share acquisitions. Basic share valuation methodology is discussed and though PAYE and NICs do not apply generally to unlisted company shares/securities, they may apply where a market exists for the securities or on the occurrence of events related to ERS. Lastly, the compliance requirements with regard to online registration of schemes, annual returns, penalties etc, are also featured.

Category: Tax
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The main aim of this work is to provide comprehensive analysis of the Employment Related Securities (ERS) legislation at ITEPA 2003, Part 7, drawing on the legislation itself, HMRC guidance and the author’s own thoughts and experience. The focus is on unlisted companies though the commentary is relevant to awards of ERS and ERS options in general.

Chapters 2 to 4 of Part 7 are principally anti-avoidance legislation applying to:

  • Restricted or convertible securities
  • Securities acquired for less than market value
  • Securities disposed of for more than their market value
  • Post-acquisition benefits connected with securities

Chapter 5 of Part 7 concerns ERS options, while the rest of Part 7 mostly contains the detailed rules relating to awards of shares and share options under the tax-advantaged employee share schemes: SIPs, SAYE options, CSOP and EMI.

A chapter of this work is devoted to each chapter of Part 7, again with the emphasis on unlisted companies where for example the restricted securities rules at Chapter 2 are highly relevant. Of the tax-advantaged share schemes, EMI (Enterprise Management Incentives) in Chapter 5, is mainly used by unlisted companies due to the financial and other limits applicable. Major coverage is therefore given to those chapters of Part 7.

However, this work would not be complete without also analysing other tax legislation relevant to ERS and ERS options in general, including:

  • ERS as general earnings for income tax purposes
  • The capital gains rules relevant to ERS and ERS options
  • The corporation tax deduction for acquisitions of ERS
  • PAYE and NICs aspects

Additional chapters of this work therefore cover those areas in some detail. A review of the decisions of the tax tribunals and courts concerning arrangements or ‘schemes’, aimed at avoidance of income tax and NICs involving ERS, also seems on-topic and merits a chapter of its own.

Part 7 is in parts complex and confusing legislation, but some understanding of which is essential for professionals advising companies of any size. The detailed commentary in this work aims to provide its target audience with as complete a guide as possible to both the technicalities and the practicalities involved in both the interpretation and the application of the ERS rules.

Imprint
Spiramus Press
Publisher
Spiramus Press
Language
English
Product Format
Paperback
Dimensions
234 x 156
Publication Date
Nov 1, 2022
Number of Pages
424
ISBN
9781913507107
Edition
4
Product Format
PDF
Dimensions
234 x 156
Publication Date
Nov 1, 2022
Number of Pages
424
ISBN
9781910151723
Edition
4