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ERS scheme

Is it or not

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Company owned by director A gave shares to director B in 2009. Director B is trying to dispose of them. A financial advisor has asked whether the Employmnet Related Scheme rules were followed.The shares are not restricted

As far as I can tell the Rules weren't followed 

BUT my query is

 Do they apply in these circumstances

Replies (6)

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Psycho
By Wilson Philips
06th Aug 2020 15:00

Doesn't matter if the rules were followed back then or not. If the shares are Employment-Related Securities (I'll make a wild stab in the dark and suggest that they are) then of course the rules that might apply on disposal should be followed.

The Devil in me hopes that they are in fact restricted and that a substantial gain is lurking.

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By bernard michael
06th Aug 2020 15:06

Wilson Philips wrote:

Doesn't matter if the rules were followed back then or not. If the shares are Employment-Related Securities (I'll make a wild stab in the dark and suggest that they are) then of course the rules that might apply on disposal should be followed.

The Devil in me hopes that they are in fact restricted and that a substantial gain is lurking.


As far as I can establish they aren't restricted and a gain of several £100k has accrued
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Replying to bernard michael:
Psycho
By Wilson Philips
06th Aug 2020 15:11

OK - doesn't alter the facts that you need to consider which ERS rules might apply on disposal.

And since HMRC generally take the view that standard pre-emption provisions etc contained in Articles can result in a 10% discount to UMV (typically seen in EMI valuations) one normally recommends a protective s431 election. If that wasn't made, I think you need to consider very carefully whether the shares are restricted, as defined.

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By bernard michael
07th Aug 2020 09:22

I've just checked and the shares total MV was less than £1000. Are there any
de-minimus rules ??

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Replying to bernard michael:
Psycho
By Wilson Philips
07th Aug 2020 10:29

No

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By bernard michael
07th Aug 2020 10:39

Thanks for the information

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