FAQ: Are there any disadvantages?
Buying partnership shares under the plan may affect your entitlement to contribution-based, earnings-related and means-tested state benefits, tax credits and work-related payments.
You will not have paid NICs on the pay that you used to buy the partnership shares. As a result, you may not have paid enough NICs to qualify for certain benefits. This will only affect a small number of people. Our leaflet IR177 - Share Incentive Plans and your entitlement to benefits - explains this in more detail.
Shares can go down in value as well as up. So, if you are thinking of buying partnership shares under the plan, you might want to consider whether you could afford to make a loss if the shares do not perform as well as you hope.
Source: Inland Revenue
