David Cohen explains how to handle some key issues in practice
Accumulation periods
If a company operating a SIP gives its employees the opportunity to purchase partnership shares (as opposed to receiving free shares) it will need to decide whether or not to have an ‘accumulation period’ during which employees’ salary deductions are accumulated. Where there is no accumulation period salary deductions must be used by the SIP trustees to acquire partnership shares on behalf of the employee within 30 days of the last time money was deducted from any employee in that month (or other pay period) (ITEPA 2003 Sch 2 para 50(1) (4)).
The number of shares to be awarded to each employee ‘must be determined in accordance with the market value of the shares on the acquisition date’ (para 50(2)).
The company may set an accumulation...
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David Cohen explains how to handle some key issues in practice
Accumulation periods
If a company operating a SIP gives its employees the opportunity to purchase partnership shares (as opposed to receiving free shares) it will need to decide whether or not to have an ‘accumulation period’ during which employees’ salary deductions are accumulated. Where there is no accumulation period salary deductions must be used by the SIP trustees to acquire partnership shares on behalf of the employee within 30 days of the last time money was deducted from any employee in that month (or other pay period) (ITEPA 2003 Sch 2 para 50(1) (4)).
The number of shares to be awarded to each employee ‘must be determined in accordance with the market value of the shares on the acquisition date’ (para 50(2)).
The company may set an accumulation...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
