Non equity shares

Non equity shares

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I need some advice regarding non-equity shares (Type A shares) and I am struggling to find the answer online (seems like a minefield!):

If a company issues a type A share to an employee with no right to vote and no rights upon winding up i.e. they just get discretionary dividends, do they avoid having to pay PAYE on this or, as has been suggested in some places that I have read, will HMRC treat this as employment income and therefore make the company pay PAYE?

Any advice/views would be appreciated.

Thanks

Paul

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By PennyC
25th May 2011 10:02

It all depends

What are the shares worth? Clearly less than shares with full voting rights etc and quite possibly worthless. But if there is value, and the employee pays less than that, then yes income tax, and possibly NI, charges will apply. Not enough room here to fully discuss the restricted securities provisions!

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