Skip to content


Checklist of action points

Following a number of recent developments, it is important to review what amendments are required for your schemes. Pett Franklin provides a checklist of action points.

1. When do your share schemes expire ? Employee share schemes of quoted companies are normally expressed to have a fixed life of 10 years (per ABI Guidelines). Check when your schemes are due to expire. New schemes (with the attendant delays in seeking HMRC approval) may not need to be established if existing rules, assuming they remain ‘fit for purpose’, can be amended to extend the life of the scheme, although this will normally still require shareholder approval in general meeting.

2. Are you optimising the tax treatment of your share incentive awards ?  L-TIPs and Deferred Share Bonus Plans can often be made more cost-effective by splitting awards into two elements : a conditional ‘fixed value’ award, and either a CSOP or JSOP award affording capital gains treatment for the future growth in value of the award shares. If you are not already making use of such a mechanism, do contact us to see if it would be worthwhile doing so. 

3. If your company qualifies for EMI options, have you taken full advantage of the recent increase (from £120,000 to £250,000) in the individual limit on the grant of EMI  options? 

4. Have you ensured that the terms of any ‘linking agreement’ between the company and the trustee of an employees’ share trust has been amended to avoid “earmarkings” under the disguised remuneration rules?

5. If you are still granting unapproved share options, have you considered switching to ‘joint share ownership awards’ ? If not, do contact us for an assessment of the potential benefits of doing so.

6. Consider if IFRS10 has implications for the share scheme accounting treatment of your EBT.

7. Check that your Share-Based Payment expenses are not unnecessarily large and take full account of recent sustained lower levels of share price volatility and interest rates.

8. If you are planning to make awards of unquoted shares to more than 25 employees, consider whether you might qualify for a pre-transaction share valuation agreement with HMRC.