Share Incentive Plans (SIP)

Guidance for Employers and Advisors

Contents

• Detailed guidance (PDF 430K)
• General information
• Model documents
• List of documents for formal approval
• Checklist
• Articles of Association
• Return
• Overseas employees
• Who to contact
• Shares valuation
• Employee Share Schemes Act 2002

General Information

Share Incentive Plans, approved by the HM Revenue & Customs, can provide tax advantages to employees and company directors. Companies must operate these plans on an all-employee basis.

Model documents

Model deeds, rules and ancillary documents are in our detailed guidance.

List of documents for formal approval

There is a list of documents required for formal approval (PDF 430K) in our detailed guidance.

Checklist

Our checklist contains the necessary features that must appear in the plan before HMRC can approve it.

Articles of Association

The company's Articles of Association (RTF 14K) need to meet certain conditions for approval to be granted to the Plan.

Return

Each year a Return is required for each approved scheme. The Trustees will also receive a Trust SA Return for completion.

Overseas employees

We have some frequently asked questions on overseas employees in our detailed guidance.

Who to contact

The Employee Shares and Securities Unit deals with the approval of the plan. The Employee Shares and Securities Unit must approve all 'key feature' amendments to the plans and trust deeds before they become effective. Proposed 'key feature' amendments to plan documents should be sent to the Employee Shares and Securities Unit to review. If the amendments are acceptable, the Unit will confirm that the company can go ahead and adopt the amendments (which become effective from the date of adoption).

Shares and Assets Valuation

Information on shares and assets valuation is also available.

Employee Share Schemes Act 2002 (ESSA 2002)

The Employee Share Schemes Bill 2002 received Royal Assent on7 November 2002. The Act makes changes to Schedule 8 of Finance Act 2000 which introduced the Employee Share Ownership Plan, known as the Share Incentive Plan. The new provisions came into effect on 6 April 2003.

News Release 68/02 outlines the purpose of the Act, main details and some background.

A detailed explanation of the Act