ESP-Software evolved from the need to make the administration of employee share plans simple and to give control of the employee share plans to companies wishing to administer their own plans.
Here, you can learn more about us.
Click here to learn more about The Share Incentive Plans Software (SIPS). And see the demonstration video.
FAQ: When can I take my shares out of the plan?
You can take your partnership shares out of the plan at any time. But, if you take them out within three years of the award you may lose the matched shares that were awarded with them.
You cannot take free, matching or dividend shares out of the plan within the first three years.
Your employer can extend this period to up to five years for free and matching shares.
If you leave your employment, your shares must come out of the plan, whether the time limits have passed or not. Some employers will arrange for free and matching shares awarded to you to be forfeited if you leave within a period of up to three years after the award.
If you take your shares out of the plan within the first five years, you may have some tax and NICs to pay. There is a more detailed explanation of the tax charges and the time limits in the table below.
Source: Inland Revenue
A Share Incentive Plan, provided that it is approved by the HM Revenue & Customs,
can provide tax advantages to both the employees and the company directors.
One of the obligations to get your share incentive plan approved is to invite all of your employees.
The Share Incentive Plan legislation provides for three main types of plan shares to be used. They are:
- free shares - employers can give each employee free shares worth up to £3,000
- partnership shares - employees can use up to £1,500 per year out of pre-tax and pre-National Insurance Contributions (NICs) pay to buy partnership shares
- matching shares - employers can give matching shares at a ratio of up to two matching shares for each partnership share bought by the employee
- dividend shares - employees may be allowed to use up to £1,500 of dividends from their plan shares each year to buy further shares in the company through the plan
£9,000 each year - A tax free investment as shares should be very encouraging!
All an employee needs to do is to keep the shares in the plan as long as possible (usually 5 years) to pay less tax and NICs when he finally takes them out.
Please refer to IFS ProShare's briefing on SIPs for more information.
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