ERSM300020 - Tax-advantaged schemes: Types of scheme
- Provision by means of options over shares
- Discretionary
- Options must be granted at or above market value
- Maximum market value on grant £30,000
- Full tax relief on gain if exercised in accordance with legislation
- Tax relief for “good leavers” within 6 months of cessation
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- Provision by means of options over shares
- Options can be granted at a discount to market value (maximum 20%)
- Linkage to savings contract with deductions from salary (maximum £250 per month)
- No risk - choice to exercise option or tax free interest on savings
- Choice of savings contracts
- All qualifying employees must be invited to participate
- Full tax relief on gain if exercised in accordance with legislation
- Tax relief for “good leavers” within 6 months of cessation
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- Four types of plan shares can be offered
- Shares awarded to or acquired for participants are held in a trust
- Maximum of £3,000 per year of free shares
- Can purchase shares to a maximum of £1,500 per year from gross pay
- Shares that are purchased can be matched by an award of shares from the company
- Dividends from plan shares can be reinvested up to £1500 per year
- Full income tax relief if shares held in trust for 5 years (3 years for dividend shares)
- Full relief for CGT if shares held in the plan until disposal
- All qualifying employees must be invited to participate
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- No approval process for scheme
- Provision by means of options over shares
- Maximum market value on grant £120,000 (£100,000 prior to 6/4/2008) (including any CSOP grant)
- Normally full tax relief available on exercise of option
