A client has proposed to gift to a key employee "B" Class shares (non voting), in order that a dividend can be paid to him. What areas must the client watch out for. Is revenue clearance needed?
B Smith
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Employment Related Securities
The B shares will be employment related securities so all of those rules need to be examined. If the B shares are gifted to the employee then there will be an income tax liability for the employee (or alternatively a PAYE and NIC obligation for the employer). There could be future income tax charges for the employee and/or the company on lifting of restrictions etc. The company will be required to make a return to HMRC showing the employment related securities that have been issued.