Tolley’s Guide to Employee Share Schemes

David is an independent consultant specialising in employee share ownership and reward management. Following a successful corporate career in which he established numerous employee share schemes worldwide, he founded his own consultancy services company, David Craddock Consultancy Services, where he has developed a varied clientele ranging from major public limited companies to small-medium sized private concerns. David is a member of The Federation of Tax Advisors and The Institute of Directors and is a regular and well known speaker at conferences and seminars.

About the author;
Abbreviations;

Section one: Why employee share schemes?;

1. Function of employee share schemes;
2. Concept of tax approval;
3. Business case for employee share schemes;
4. Empirical evidence for employee share schemes;
5. Employee share scheme: case studies;

Section two: Current issues in employee share schemes;

6. Process of scheme design;
7. Underwater options and share price volatility;
8. Coping with a downturn in the share price;
9. Progressive communication strategies ;

Section three: The Government tax-sponsored schemes;

10. Approved savings-related share option scheme;
11. Approved executive/company share option scheme;
12. Approved share incentive plan;
13. Enterprise management incentives;
14. Finance Act 2003 changes to the tax approved schemes ;

Section four: The traditional tax-unapproved arrangements;

15. Tax-unapproved share option scheme;
16. Phantom share option scheme;
17. Inheritance tax;

Section five: Employee share trusts;

18. Origins of the employee share trust;
19. Operation of the employee share trust;
20. Employer’s responsibilities in operating employee share trusts;
21. Checklist for an employee share trust;
22. Employee share trust for management buy-outs;
23. Tax issues for employee share trusts established by close companies;
24. The diagrammatical representation of key trust principles;

Section six: The statutory and regulatory framework;

25. Securities law;
26. Financial services law;
27. Model Code and insider dealing;
28. Employment law;
29. Age discrimination;
30. Share schemes for non-employees;
31. Annual report disclosure requirements;
32. Institutional investor guidelines;
33. European Prospective Directive;
34. Accounting rules;
35. Treasury shares;
36. Transfer pricing and recharge arrangements;

Section seven: Mainline tax provisions;

37. Pay-as-you earn and national insurance contributions;
38. Corporation tax relief, including deferred tax credits;
39. Capital gains tax implications for employee share schemes;

Section eight: The interpretation of Part 7, ITEPA 2003;

40. Development of the tax legislation;
41. Employment-related securities – Finance Act 2003;
42. Restricted securities: Chapter 2;
43. Convertible securities: Chapter 3;
44. Securities with artificially depressed market value: Chapter 3A;
45. Securities with artificially enhanced market value: Chapter 3B;
46. Securities acquired for less than market value and notional loans: Chapter 3C;
47. Securities disposed of for more than market value: Chapter 3D;
48. Post-acquisition benefits from securities: Chapter 4;
49. Alphabet shares;
50. Shares in research institution spin-outs companies: Chapter 4A;
51. Earn-outs;
52. Share loan schemes;
53. Subsidiary company share schemes;
54. Growth shares;
55. Flowering shares;
56. Ratchet arrangements;
57. The reporting of employment-related securities;

Section nine: The overseas implications;

58. Overseas scheme arrangements for overseas employees;
59. Overseas implications for UK interfacing companies;
60. Employee share schemes in the USA;

Appendices;
Appendix A: ABI Guidelines on policies and practices;
Appendix B: HMRC SAYE Option Form 34;
Appendix C: HMRC Company Share Option Form 35;
Appendix D: HMRC Share Incentive Plan Form 39;
Appendix E: HMRC Enterprise Mangement Incentives Form EMI 40;
Appendix F: HMRC Employment Related Securities Form 42;
Appendix G: Further reading;
Index