ERSM70480 - Securities Acquired for
less than Market Value
Internationally mobile employees: practical considerations
The employer can find compliance more difficult when he has
internationally mobile employees. If the acquisition of shares,
whether or not under an option, means there is a liability within
Chapter 3C, the notional loan will carry on until the shares are
sold. This may be after the employee has left the employment or the
UK.
Leaving the UK or the employment does not constitute the
discharge of a notional loan within the meaning of the legislation.
Employers, in order to monitor the time when securities are
disposed of, may wish to consider the following possibilities:
- using information held elsewhere in their
organisation, e.g. in HR departments or for the purposes of
calculating a recharge between grouped companies;
- making the supply of relevant information
a condition of participation in a scheme. If the employee does not
comply with these, the employer will be able to show that they
themselves have done everything possible to comply;
- using a bare trustee to hold the shares,
who would notify the employer when the shares were disposed of;
or
- bed-and-breakfasting the shares (i.e.
requiring the employee to dispose of the shares and immediately
reacquire them when they leave the employment or the UK, so as to
discharge the notional loan.
