Shares as part of renumeration package

[blueg33]

Hi

I hope someone here can help/provide guidance before we trot off to the acountant

Mrs B has been oferred a job which has part of the bonus paid in shares deferred for 3 years, an annual exec scheme that gives between 1000 and 2000 shares and a golden hello that gives £10k worth of shares deferred for a couple of years.

I am trying to understand how payments in shares are treated for tax purposes. Mrs B is a higher rate tax payer and this position will lift her over £100k but under £150k.

Will she just pay PAYE on the value of shares? If so, is it the value now or the value when they are sold? As they are deferred does that make a difference?

[qureshia]

The schemes I've seen/been part of

No tax until the shares 'vest' and are truly hers ....in 3 years time, at this point paye due on the value at that time (plus NI)

[Countdown]

Depends whether or not the scheme is HMRC approved. If it is then usually no Tax or NI is payable depending on the scheme. There may be CGT payable if and when she sells them.

ETA it sounds like an EMI scheme in which case if they are free shares she will need to pay tax and NI basesd on the value of the shares when they were allocated to her. IT & NI becomes payable in the year the shares actually "vest"

Edited by Countdown on Thursday 19th December 20:17

[LC23]

Please get proper advice on this. There is no way anyone can confirm to you the correct tax and NIC position without reviewing the plan rules and documentation.

[blueg33]

Thanks folks. It looks like its not part of an HMRC scheme, just a bunch of shares handed over. So that means PAYE when handed over and CGT if they perform.

PAYE part makes the shares difficult to hold without a cash flow hit.

[Ginge R]

Blue,

If your wife is in that tax bracket, pay a few quid to sit down with someone who can put it into context for you (both). Information from a messageboard isn't the same as tailored advice from a professional.

[blueg33]

Ginge R said:

Blue,

If your wife is in that tax bracket, pay a few quid to sit down with someone who can put it into context for you (both). Information from a messageboard isn't the same as tailored advice from a professional.

Agreed, as I said it was a question before we trot off to the acountant. The whole package is in the negotiation stage. The shares thing is a tricky one, the share price has doubled in the last 12 months, so I am slightly worried that they are at the peak, so holding may not be sensible anyway

[northandy]

I had a scheme similar, so many shares vesting over a 3 year period after 3 years. I got 600 shares.

At the first vesting point the price on the day was used for the paye transaction, so 200 shares at that price. They then sell 82 of them to cover 40% tax and 2% NI so I get left with 118 shares I can either sell or hold.