Unapproved Share Schemes Contractors

What are the Pitfalls

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My client has stopped being an employee and has rejoined the company as a consultant. His EMI shares no longer qualify as a result but the company has offered him unapproved shares instead. 

He has asked whether to sign the deed as his PSC, would I be right in thinking that will definitely be straying into IR35 waters. It's a bit grey as it is, but there is no supervision and control so he is not firmly in the net.   As I understand it there is no tax at grant but at exercise for employees. Is this the same for contractors? Did the Finance act 2016 change the tax treatment? If it did, can someone please point me in the right direction of any guidance available? 

What are the pitfalls of this arrangement? Thanks

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