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Share scheme ceases

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09 November 2010

Issue: 4280 / Categories: Forum & Feedback , Employees , Income Tax

A public limited company had a save-as-you-earn share scheme, but a management buy-out took place 30 months after the start of an employee’s three-year savings plan

A public limited company with 13 000 employees de-listed to become a private company after a management buy-out (MBO). They had save-as-you-earn (SAYE) linked share option plans for all their employees.

The MBO took place about 30 months into a three-year SAYE offer the minimum savings contract being 36 months. It seems the scheme then became an unapproved rather than an approved scheme.

The HMRC compliance inspector is chasing my client – one of the employees – for PAYE on the gain made from the cash offer for shares. The company gave the employees in the SAYE scheme a bonus subject to tax and NICs under PAYE equivalent to the remaining amount that they would have saved under the scheme (say six months in my client’s three-year SAYE case).

The employees were able to use that bonus to purchase shares but at the current market value....

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Share scheme ceases

© Copyright LexisNexis 2024. All rights reserved.

09 November 2010

A public limited company had a save-as-you-earn share scheme, but a management buy-out took place 30 months after the start of an employee’s three-year savings plan

A public limited company with 13 000 employees de-listed to become a private company after a management buy-out (MBO). They had save-as-you-earn (SAYE) linked share option plans for all their employees.

The MBO took place about 30 months into a three-year SAYE offer the minimum savings contract being 36 months. It seems the scheme then became an unapproved rather than an approved scheme.

The HMRC compliance inspector is chasing my client – one of the employees – for PAYE on the gain made from the cash offer for shares. The company gave the employees in the SAYE scheme a bonus subject to tax and NICs under PAYE equivalent to the remaining amount that they would have saved under the scheme (say six months in my client’s three-year SAYE case).

The employees were able to use that bonus to purchase shares but at the current market value....

If you or your firm subscribes to Taxation.co.uk, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Subscribe Now...

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.

Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.

Issue:

4280

Categories: Forum & Feedback [1] , Employees [2] , Income Tax [3]

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