Understanding the tax planning opportunities and avoiding tax traps and pitfalls is at the core of all our planning and reconstruction work. We offer integrated tax advice in respect to the acquisition and disposal of businesses but in addition we offer a further range of specialist tax advice.
Share Option Arrangements
Most employees value an equity interest in their employing company beyond its monetary value, offering an employer a very cost-effective means of retention. However, a transfer of shares has complex tax and legal ramifications and in many cases the use of a share option is preferable.
Where a share option can be delivered within a tax approved framework this typically offers the greatest value and flexibility for most unquoted companies. We have significant experience in dealing with tax approved share option schemes, including enterprise management incentive share options and company share ownership plans which offer benefits to both employee and employer without the usual legal complexities that typically arise on the award of shares.
In most cases it is possible to achieve a 10% tax rate for the option holder on a successful exit with a useful tax deduction for the employing company. Tax approved options offer significant flexibility as far as imposing performance conditions and restrictions on exercise thus ensuring the option only becomes exercisable in the event of performance delivery or an event such as the sale or flotation of the company.
Our experience enables us to quickly identify the best solution where share options are contemplated.