EUROPEANCHAPTER

The UK’s new Private Intermittent Securities and Capital Exchange System (PISCES), launched in 2025 under a five-year regulatory sandbox, creates a regulated platform for intermittent trading of private company shares, bridging the gap between private and public markets. It provides liquidity for employees and early investors, offers pension funds and institutions access to private equity in line with regulatory goals, and allows companies to control trading parameters while retaining capital structure flexibility. While PISCES enhances transparency and capital formation, it does not guarantee continuous liquidity or raise new capital, making due diligence and governance alignment critical for both investors and private firms.

This helpsheet explains how Capital Gains Tax (CGT) applies to shares acquired through employee share schemes, including SIPs, SAYE, CSOPs, EMIs, and unapproved schemes. It outlines how to calculate the capital gains cost of shares, available reliefs (such as transfers to ISAs, pensions, or SIPs), and specific rules for restricted or same-day share acquisitions. It also details special provisions for Employee Shareholder Shares (ESS), including lifetime gain limits, and provides guidance on elections, claims, and compliance requirements.

NewRiver REIT plc announced that its Employee Benefit Trust has purchased 3 million ordinary shares to support current and future employee share schemes, reinforcing its commitment to staff and shareholder value. Analysts are mixed on the stock, with a recent Buy rating targeting £90.00 per share, while Spark’s AI analyst maintains a Neutral view due to bearish momentum and high leverage risks. NewRiver, a UK-based REIT specializing in retail assets, manages a £0.8 billion portfolio (7.9m sq ft) and £2.4 billion in total assets under management, focusing on retail parks, shopping centres, and regeneration projects.

CFOs should stop viewing compensation purely as a cost and instead treat it as a strategic investment aligned with business goals, using data-driven approaches that balance base pay, variable pay, equity, and benefits. A comprehensive compensation strategy helps retain top performers, manage underperformers, and attract talent even in uncertain markets, avoiding the costly turnover and inefficiencies of reactive, boom-and-bust pay tactics. By leveraging market intelligence and flexible incentives, companies can maximize the value of every compensation dollar and build resilience through economic cycles.

Equity compensation is a key tool for startups to attract and retain talent while conserving cash, offering employees ownership stakes that align their incentives with the company’s long-term success. Common forms include restricted stock awards (RSAs) and stock options (ISOs and NSOs), each with different tax treatments, benefits, and risks. While equity can motivate employees and provide significant financial upside, it also introduces legal, tax, and administrative complexities, making careful plan design and professional guidance essential.

This update highlights key global changes affecting employee share plans, including new or increased taxes in Belgium, Nigeria, Rwanda, and Argentina, as well as updated social security and taxation rules in Singapore and Vietnam. In the UK, the new PISCES framework will allow periodic secondary trading of private company shares, with draft legislation ensuring EMI and CSOP schemes can adapt without losing tax benefits, alongside clarifications on “Readily Convertible Assets.” Regular compliance deadlines across markets such as Australia, India, Saudi Arabia, Vietnam, and China are also noted to help companies stay aligned with reporting obligations.

Employee share plans allow staff to acquire shares in their company through awards, options, or purchase schemes, often with tax advantages. When designed and communicated effectively, they boost retention, motivation, and recruitment by aligning employees’ interests with long-term business success. Beyond financial benefits, these plans foster trust, engagement, and a culture of shared ownership that can significantly enhance company performance.