FREE share certificate template

Use this template (or something similar) when you issue shares in your company:

Share certificate template

Ensure that you record the shareholder's name and address and the number of shares issued. Number each certificate in the company's secretarial records.

Tax and shares

If you are planning on giving a director or employee free shares or allowing them to subscribe to shares in the company at less than market value there will potentially be an Income Tax charge under the Employment-related securities rules.

The tax charge will be the difference between the price that they pay and market value.

You might consider setting up a tax-advantaged share option scheme under the Enterprise Management Initiative or using a Company Share Option plan. Alternatively, you can consider using an employee benefit trust to hold shares and operate a flexible unapproved share scheme. Despite the fact that these schemes are not tax-advantaged, they can achieve a similar result if they are structured as part of a planned remuneration package.

Contact us if you would like further assistance or are unsure how the tax charge works in your case.

Useful guidance on these topics

Share scheme basics for small companies
This guide explains how shares are taxed when they are employment-related and illustrates the tax effects when a new director is promised shares under an unapproved share or share option scheme.

Enterprise Management Incentives (EMIs)
This guide explains the tax-advantaged EMI scheme and comes with a checklist.

Share awards: Filing and tax penalties
A summary of your filing obligations and what it costs when you get it wrong.

More links
Employee benefits and share schemes

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