What are share schemes?

 

An employee share scheme/share plan/ESOP is a structure that allows employees to participate in their businesses on a significant scale in a tax efficient way.

Over two million employees in the UK are part of an employee share ownership scheme, whether HMRC-approved or not. Companies with employee share schemes consistently out-perform other businesses in terms of share performance. Moreover, employee share ownership has a positive effect on innovation, staff retention and productivity.

 

Esops can take the form of:

• share options scheme where employees have the option to buy shares at a later date at a price set at the date of grant
• share-gifting scheme where the company allocates shares from a trust to employees in the form of beneficial ownership
• share purchase scheme where an employee can buy shares in the company at a discounted rate

 

For more information on the four HMRC (and therefore most tax-advantaged) employee share schemes click on the links below or contact the Centre on 0207 239 4906.

SAYE (Save as you Earn) Sharesave SAYE is an all-employee share scheme share option scheme. Employees receive a discount of up to 20% on their options after a 3 or 5 year saving period.	The CSOP (Company Share Option Plan) The CSOP is a discretionary share option scheme, traditionally used for selected directors, but increasingly used as an all-employee scheme.
The SIP (Share Incentive Plan) The SIP is an all-employee share gifting and share purchase scheme. Employers can match contributions with free shares.	EMI (Enterprise Management Incentives) EMI is an discretionary approved share scheme which has proved very popular with SMEs.