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Underwater exercise

15 September 2009 / Philip Fisher
Issue: 4223 / Categories: Comment & Analysis , Capital Gains , Employees , Income Tax
PHILIP FISHER explains why the recession means that companies need to take another look at share options


  • Using share schemes to mitigate the impact of the 50% tax band.
  • The importance of timing when taking up option rights.
  • Using growth shares and partly-paid shares.
  • Planning points when share options are ‘underwater’.
  • Tax advantages of enterprise management schemes.

Employee share schemes are set to become even more popular than in recent years. This is a direct consequence of a series of factors all of which have come together in the past year.

In light of the collapse of some big names the Government has made it clear that it will frown on the payment of bonuses to bankers and potentially other City high rollers.

One of its favoured solutions is the use of shares as an incentive. Given no choice there is thus an...

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