OTS report on share options

June 28, 2012

Also published recently, the Government response to the Office of Tax Simplification’s report on tax-advantaged share option schemes, including a fairly wide-ranging consultation on points raised by the report.

It’s a rather dense document, but the main points are:

  • SIP/SAYE/CSOP to be self-certified: at the moment, a company setting up one of these schemes needs HMRC approval for the scheme, which is tedious.
  • harmonised approach to retirement across SIP/SAYE/CSOP schemes

HMRC is also requesting views and evidence on:

  • problems with schemes, where there is a cash takeover
  • possible removal of the material interest restrictions (where the employees owns a significant minority of the shares in the company)
  • allowing a wider range of restrictions on shares used for SIP/SAYE/CSOP schemes
  • changing the basis for calculating SAYE partnership share entitlement
  • removing PAYE penalties that can arise due to timing issues on SIP shares leaving the scheme early
  • permitting reinvesting in the SIP scheme of dividends received on shares in the scheme
  • removing the 7 year SAYE savings period
  • expanding the circumstances under which contributions can be made to an SAYE scheme (eg: more than just by deduction from salary)
  • extending the exercise period for EMI options where there is a disqualifying event, from 40 days to 6 months
  • harmonisation of ‘good leaver’ provisions across the schemes
  • whether the CSOP scheme is still relevant!

Responses to HMRC by 18th September 2012.

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