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.

The Takeover Panel and FCA have introduced major updates across UK corporate and capital markets regulation, including consultations on dual class share structures, new practice statements, and reforms to the prospectus and public offers regime. Key changes include higher thresholds for further issuances without a prospectus, a new regulated public offer platform for unlisted securities, reduced IPO prospectus review periods, and stronger protections for forward-looking statements. Alongside this, the government is progressing digitisation of shareholding, tightening reporting requirements, reforming national security notifications, and requiring Companies House filings via software from 2027.

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.

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.

Employee share schemes allow companies to give or offer shares to employees, providing financial incentives, tax advantages, and helping with talent retention and engagement. Common schemes include Share Incentive Plans (SIPs), Save As You Earn (SAYE), Company Share Option Plans, and Enterprise Management Incentives (EMIs), each offering different tax benefits depending on the structure. These programs not only reduce tax liabilities for both employers and employees but also foster a positive workplace culture by aligning staff with the company’s long-term success.

The UK government's new PISCES trading platform introduces regulated, periodic opportunities for shareholders in private companies to sell shares, addressing long-standing liquidity challenges for employees and early investors. Legislative changes ensure that participation in PISCES will not jeopardize the tax-advantaged status of EMI and CSOP options, removing a key barrier to broader employee share ownership. While the platform holds promise, its success will depend on forthcoming FCA rules and how companies balance legal, tax, and practical implications before opting in.

UK businesses that grant shares or other securities to employees, directors, or officer holders must submit an Employment Related Securities (ERS) annual return to HMRC by July 6, covering all equity-related activity from April 6, 2024, to April 5, 2025—even if no activity occurred. One-off awards still count as a “scheme” and must be registered online, with companies required to self-certify tax-favoured plans and retain screenshots of the entire reporting process for their records. Penalties apply for late filings or inaccurate information, and awards to Employer of Record employees must typically be reported by the Employer of Record.

HMRC’s latest statistics for tax years ending 2022 to 2024 show that employees received £790 million in Income Tax relief and £500 million in National Insurance relief from tax-advantaged Employee Share Schemes in 2024—a combined 18% increase from the previous year. Save As You Earn (SAYE) became the largest contributor to tax relief and had the highest total value of options granted and gains, driven by increased participation post-Covid and asset price growth. The number of companies operating ESS rose to 20,370, while the Company Share Option Plan (CSOP) saw significant growth following the doubling of its option limit.