What type of share scheme is best for a director or employee? Is it a good idea to set up different share classes? What about share option schemes?

 For a rundown of the basic rules on taxing awards of shares and securities see:

• Employment-related securities (share scheme basics)
  
  • A company may issue shares or share options to a director or an employee. 
    • A share award is ‘employment related’ if made to a prospective, current or past director or employee.
  • You generally cannot give an employee or directors shares without tax consequences.
  • The general rule is that unless the employee pays the full market value for their shares there will potentially an Income Tax charge on the acquisition of their shares.

If you are considering share options see

• EMI: Enterprise Management Incentives: at a glance
  The Enterprise Management Incentive (EMI) is a tax-advantaged employee share option scheme designed for small and medium-sized companies.

If you are dealing with family companies and shares are being issued to family members, see:

• ABC different share classes: Family companies
  for a checklist and discussion on anti-avoidance issues when you create different share classes and special rights for family company shares.

For share awards outside family companies, see:

•   ABC different share classes: Directors & employees
  
  

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