The Government has recently carried out two consultations, on the idea of a “safe harbour” trust and the concept of the “marketable security”.
“Safe harbour” trust
The government has issued a discussion paper on the idea put forward by the Office for Tax Simplification (“OTS”) that there should be provision made for a ‘safe harbour trust’ (referred to in the document as a “new employee shareholding vehicle”) aimed at those companies wishing to make arrangements purely for the purpose of genuine equity based rewards and remuneration for employees as opposed to tax planning activity.
You can read Pett Franklin’s response to the consultation here.
“Marketable securities”
This concept was originally suggested by the OTS as a means to avoid “dry” tax charges on the acquisition of shares – i.e., the need to pay tax in relation to that acquisition at a time when it is not possible to sell the shares in order to fund the tax charge. The point in time at which an employee is charged to income tax (and NICs) on the acquisition of employment-related securities would be moved to the first time at which their value is capable of being realised.
The government’s consultation document involves some changes to the OTS’s original proposals, and can be found here.
You can read Pett Franklin’s response to the consultation here.