Tax and Reporting Implications of Employment Related Securities (ERS)

• The employment related securities training course is highly practical and will include multiple examples to assist with understanding the rules
• It is presented by an independent training professional and can be a completely independent look at the issues raised
• The employment related securities course will encourage participation and allow for all questions and clarifications to be considered
• The employment related securities training course will always be completely current and relevant

• Gain a clear understanding of the employment related securities guidance, including the exceptions that apply to the rules.
• Identify when income tax and national insurance charges arise in connection with employment related securities
• Identify what elections can be made to vary the normal tax treatment and in what circumstances this is beneficial or disadvantageous
• Understand the conditions that must be met for a scheme to be ‘tax-advantaged’, including Sharesave schemes tax, Company Share Option Plans, Enterprise Management Incentive options and Share Incentive Plans
• Identify what aspects of each scheme the company operates have to be reported in the ERS annual return share schemes

Introduction to share awards

• Employment related securities meaning
• Phantom share awards
• Scope of legislation (ITEPA)
• Exception – family transactions

Basic principles

• Income tax
• National insurance
• Capital gains tax on share issued to employee’s awards

Restricted securities

• Exceptions to normal tax rules
• Tax charges arising when restrictions removed
• Elections that can vary the normal tax rules

Convertible securities

• Normal tax rules
• Exception
• Calculations

Shares artificially suppressed in value

• Charge on acquisition

Shares artificially enhanced in value

• De minimis exception
• Charging rules

Shares acquired at less than market value (if not caught by items above)

• Amounts treated as employment income

Securities disposed of for more than market value

Post-acquisition benefits received in relation to employment related securities

Notional loans

• When they arise
• Taxable amount
• Example
• Discharge of loan

Unapproved share options

• Tax charge on exercise

Approved share schemes (Sharesave, CSOPs, EMI, SIPs)

• Conditions
• Tax charges

Internationally mobile employees

• Importance of residence for tax charges
• Calculation of chargeable UK income from employment share schemes reporting
• Recent case law decisions

Using share awards in the current environment – trading salary for shares

Annual Employment Related Securities reporting of share schemes

Case studies

• Calculations with restricted securities
• Effect of s431 election
• Effect of s430 election
• Calculations with convertible securities
• When notional loans arise and the consequent tax charges
• Notional loans when the shares are disposed of
• Share options for internationally mobile employees (foreign service income and taxable share income)

The trainer is a UK Chartered Accountant and Chartered Tax Advisor winning the John Wood Medal in the November 1995 CIOT sitting for the best paper on business taxation.

He was previously Director of Finance and Taxation Programmes at BPP Professional Education and has delivered IFRS, US GAAP, UK Tax and VAT to a multitude of organisations worldwide since 1992.

He has particular experience in delivering bespoke IFRS and US GAAP training programmes to multinationals in the financial services, transport and energy sectors as well as delivering UK tax and VAT update programmes to accounting and law firms.

The trainer is passionate about training and his enthusiasm ensures that the participants enjoy the learning experience whilst gaining knowledge through their engagement in the sessions and through encouraging them to ask questions and discuss practical issues they may have.

He also provides consultancy services to companies and accounting firms, including provision of tax and VAT advice, reviewing accounting policy manuals and advising on accounting treatments of various transactions.

This employment related securities course is designed to help attendees understand the employee share scheme tax implications of employee share schemes and option ERS schemes.

It will discuss the various income tax and potential national insurance liabilities arising from non-tax advantaged schemes and the conditions that need to be met for a scheme to be tax advantaged.

Delegates will learn through multiple examples how the calculations work and what information must be reported to HMRC each year in respect of share schemes in the annual employment related securities return.