Our Aim
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: Dividend Shares
As a shareholder you may be paid dividends on your shares.
If you receive dividends on your free, partnership or matching shares, your employer may allow you to use those dividends to buy more shares to be held in the plan. These are dividend shares. You are allowed to use up to £1,500 of plan dividends in this way in any tax year. You will not have to pay income tax on these reinvested dividends as long as the shares you buy with your dividends are held in the plan for at least three years.
If you do not use your dividends to buy more shares in this way, they will be taxed in the same way as other dividends. If you are a higher rate taxpayer you will need to enter the details on your Self Assessment tax return.
Source: Inland Revenue
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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.
Beat the recession!
Beat the recession and save on outsourcing costs by taking control and managing your SIP in-house with our SIP software.
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