Alan Pink looks at an often-overlooked problem with share awards in family companies.
For anyone advising limited companies and their directors, the initials ERS (employment-related securities) tend to send a shiver of fear down the spine – or, if they don’t, perhaps they should do.
Taking up a huge number of pages in ITEPA 2003, the rules on ERS are designed to charge income tax on situations where an employee gets a benefit in the form of paper in his employer company or an associated company.
This is a good example of the bureaucratic tax collecting machine that is HMRC taking on a life of its own and bringing about results that are certainly not in the interests of business or the economy of the UK. But, like it or not, the rules are with us.
