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Say it with shares
Key points
- Enterprise management incentives are restricted to 250 employees.
- Employees are liable to tax on unapproved share options.
- Importance of making an ITEPA 2003 s 431 election.
- Companies can claim a corporation tax deduction when the employee exercises share options.
- Exercise of company share option plan options can be conditional on specified performance targets.
Charles Carson is the finance director of a successful information technology company Downton IT Ltd (a close company for tax purposes). It has prospered significantly throughout the ‘Covid’ years posting a 30% increase in fee income in the year ended 31 March 2022. He was reflecting over the previous day’s board meeting at which it was proposed to grant a further series of share options to some of its senior IT specialists and managers before March 2023. Charles was tasked to explore the most tax-efficient way to achieve this.
‘It’s a pity that...
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