Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Underwater definition

What does Underwater mean? Underwater describes, in restructuring and insolvency practice, a creditor, secured position or tranche whose recoveries sit below the value-break in the capital structure. In practical terms it is out of the money: based on valuations, it is unlikely to receive a full return (and may receive no dividend) under the distribution waterfall or a restructuring outcome. The term is market shorthand, not a defined term in UK or Irish insolvency legislation or case law, though the concept aligns with tests for economic interest used by the courts. In England and Wales, Scotland and Northern Ireland, it informs class formation...

COVID-19 and UK employee share schemes: EMI, SAYE, SIP, CSOP—HMRC easements, CJRS/JSS implications, valuations, leavers, underwater options, performance conditions and reporting

Published by a LexisNexis Share Incentives expert

Practice notes

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ARCHIVED: This Practice Note has been archived and is not maintained.

Amid the coronavirus (COVID-19) emergency, the government introduced a range of measures connected to the UK tax framework. For further information, see Practice Note: Coronavirus (COVID-19)—tax implications [Archived].

This Practice Note gives a high-level overview of how the pandemic influenced existing tax-advantaged share schemes and triggered updates to HMRC guidance and legislation. It also examines how companies approached Underwater share options and performance conditions rendered unsuitable by the ensuing economic environment. These points are relevant to all share Plans.

The coronavirus job Retention scheme (CJRS) and the Job Support Scheme (JSS)

The Coronavirus Job Retention Scheme (CJRS), first announced on 20 March 2020, supported UK employers with grants enabling them to continue paying up to 80% of salary not worked (capped at £2,500 per employee per month) for staff placed on ‘furlough’, subject to meeting certain Requirements. The CJRS officially ended on 30 September 2021. For further details of the scheme, see Practice Notes: Coronavirus Job Retention Scheme (original version to...

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Web page updated on 21/05/2026

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