SVM110010 - Tax Advantaged Share Schemes: Introduction
There are four types of tax advantaged share scheme [TASS]:
- CSOP. Company Share Option Plans.
- SAYE. Save as You Earn schemes are savings related share option schemes.
- SIP. Share Incentive Plans provide free shares, partnership shares, matching shares and dividend shares.
- EMI. Enterprise Management Incentives are unapproved share option schemes.
SAV provide a valuation checking service for companies who wish to obtain assurance on the market value before options are granted.
Before the introduction of the ERS Online service in April 2014 companies were required to obtain prior approval from HMRC for CSOP, SAYE and SIP scheme; prior approval of an EMI scheme was not required.
From that date HMRC no longer approve new tax advantaged schemes and companies must self-certify CSOP, SAYE and SIP to confirm that they meet legislative requirements. All new schemes have to be registered with HMRC by 6th July following the end of the tax year.
You must notify HMRC of the grant by 6 July following the end of the tax year in which the grant was made. A company can still notify HMRC of options granted during the tax year in which they were granted.
When considering the market value of a share, we consider the rights attaching to the shares as set out in the Articles of Association, especially where there are different classes of share in issue; we consider the precise rights attaching to each share class in order to consider the potential impact on value. Any request for a valuation asking us to consider the value of shares which do not currently exist is not considered, until the Articles are adopted by special resolution.
However, where a transaction involving institutional investors is taking place and is part of the award of share options, a copy of the draft Articles of Association would be acceptable, provided it is accompanied with a board resolution approving the Articles, and subject to a special resolution approving the new form of Articles being passed by shareholders on completion of the transaction. Any agreement to a value would be based on the actual transaction completing and the passing of a special resolution adopting the Articles.
More information on an introduction to Tax Advantaged Share Schemes can be found in ETASSUM11000
Additional Guidance: