Tax-advantaged share scheme
An employees’ share scheme providing shares or share options that qualify for statutory tax reliefs. There are currently four types of tax-advantaged share schemes:
- Company share option plan (“CSOP”)
- SAYE option scheme
- Share incentive plan (“SIPs”)
- Enterprise management incentives options (“EMI options”)
Tax-advantaged schemes must meet certain requirements to qualify for beneficial tax treatment.
These schemes do not need to be approved by HM Revenue & Customs in advance, but instead must be notified to HM Revenue & Customs online and companies must certify that their schemes meet the statutory requirements. However, it is still common to refer to tax-advantaged schemes as approved schemes. Tax-advantaged schemes may also be referred to as tax-favoured share schemes.
Non-tax-advantaged share scheme
An employees’ share scheme that does not qualify for statutory tax reliefs. Non-tax-advantaged share schemes may be referred to as unapproved schemes. Non-tax-advantaged share schemes might also be referred to as non-tax-favoured or fully taxable share schemes.
Although non-tax-advantaged share schemes do not qualify for specific statutory reliefs, some schemes will be designed to be tax-efficient and will, in some ways, be taxed in a similar way to tax-advantaged schemes.
If your business is implementing a share scheme contact our employment team today.