UK participants in offshore share plans

Produced by Tolley in association with

Employment Tax

Guidance

Share plans are increasingly popular as employee incentive arrangements and multinational businesses often offer participation to employees in several jurisdictions. This can lead to administrative and tax headaches, so the purpose of this note is to set out the key issues which an overseas employer needs to consider when extending their share plan to UK employees or executives.

Some companies offer global plans on the same terms to all employees wherever resident. These organisations need to ensure that they understand the regulatory requirements in the jurisdictions in which they operate and that they deal with these and, in particular, tax withholding requirements. This is to ensure that neither the employees nor the employer have a nasty (and potentially costly) surprise waiting for them in the form of interest and / or penalties which could negate the incentivising effect of the award.

Other organisations seek to make use of local tax advantaged arrangements which typically take the form of sub-plans which operate under an ‘umbrella’ plan which includes the

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Caroline Harwood

Partner, National Head of Employment Tax at BDO , Employment Tax

Caroline leads the Employment Tax Team in London and has over 25 years’ experience specialising in all aspects of employment taxes. Her clients range from entrepreneurial fast growing businesses to international household names as well as charities and not for profit organisations. Her focus is across all aspects of employment taxes in particular the off-payroll working rules (IR35), employment status for tax, termination/settlement payments, employment tax implications of agile working arrangements, management team advice on transactions, employee benefit reviews, PAYE/NIC compliance and reporting etc.

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