Joe Brough considers the tax implications for employees when given share options in owner-managed businesses as part of their remuneration package.
At their most basic level, share schemes can be split into two categories;
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tax-advantaged schemes; and
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non- tax-advantaged schemes.
By enabling employees to receive shares, employers can benefit by not only reducing the chances of an employee leaving, thus providing business continuity and stability, but also motivating employees to drive business growth so that they can share in the benefit of the success of the company over time.
In order to motivate employees, it is usual for companies providing share options of any sort to align the vesting period with specific performance conditions, which the employee must meet before they can exercise their options to buy.
