The legislation applies equally to directors, office-holders & employees. So a company secretary, who may be neither a director nor an employee, is within the scope of the rules.
The rules also apply to prospective employees or former employees (ITEPA03/S421 (2)(b)). So an option granted to a director before taking up employment will be potentially liable to tax on exercise. And a share package awarded to an employee after retirement will also be within the legislation.
It is sometimes suggested that shares are not employment-related securities because they are acquired by “founders”. There is no concept of “founders shares” in the legislation. The founder of a company who is to be a director of that company from the start acquires employment-related securities and is within the scope of the rules.
Provided the founder pays the full market value for the shares when they are acquired the fact that they are employment-related securities will not result in any liability on acquisition. However, if value is then passed to the shareholder otherwise than by:
then it is employment reward and the rules will subject it to income tax and NICs.
