Share Options

You can give employees the right to buy shares in the company or give shares to employees as gifts.

The shares may be given as part of an approved share scheme, which may have special income tax treatment, or they may be given under a scheme which does not qualify for any special income tax treatment (an unapproved share scheme). Alternatively, it may be as simple as the company giving one or more shares to one or more employees without a formal scheme.

With any of these options, the company may be entitled to a deduction in calculating its taxable profits. The availability, timing and amount of any deduction will depend on how the shares are made available to the employee.

Always consider:

  • Alternative methods to incentivise and motivate staff. This could be Long Term Incentive Plans (LTIP) or bonuses linked to individual or company performance
  • Other elements that may be valuable to employees, which will be different for different people, including job title, pay, perks, flexible working and holidays

If it’s the right time to give away shares – remember taking shares back when they’ve been issued is not an easy task.

Vibrant Accountancy, Accountants in Derby