Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Rules definition

What does Rules mean? Rules describes the written provisions that govern how a pension scheme operates—especially occupational pension schemes—usually contained in, or annexed to, the trust deed (trust deed and rules). Legislation refers to these as scheme rules (for example, Pensions Act 1995 and Pensions Act 2004 in the UK, and the Pensions Act 1990 in Ireland). Scheme rules set out eligibility, benefit structure (defined benefit or defined contribution), contributions, service and accrual, retirement options and ages, revaluation/indexation, ill‑health and death benefits, transfers in and out, leaver provisions, forfeiture, augmentation, priority on winding‑up, discretions and decision‑making, and the scheme’s amendment and termination powers. They also...

Joint Share Ownership Plans (JSOPs): UK tax treatment—employment-related/restricted securities, section 431 elections, valuation, PAYE/NICs, realisation, disguised remuneration, call options, CGT, corporation tax, stamp duty

Published by a LexisNexis Share Incentives expert

Practice notes

Summary of the tax treatment of the acquisition of an interest in a jointly owned share

Putting to one side the specific statutory provisions for employment-related securities outlined below, providing an individual with an interest in jointly owned shares as part of their overall package would be taxed as ordinary pay. Nevertheless, the employee acquires an “interest in an employment-related security”. Moreover, the eventual tax position is influenced by the targeted provisions in the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003) concerning restricted securities. Typically, to avert later income tax and National Insurance contributions (NICs) becoming payable when such restrictions are lifted or amended, the parties enter into a joint election under ITEPA 2003, s 431. This Practice Note explores each of these tax considerations in greater depth below. For more general guidance on joint share ownership plans (JSOPs) and awards, see Practice Note: Introduction to JSOPs.

Employment-related securities

The interest obtained by the employee is an interest in an employment-related security...

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Stephen Woodhouse

After studying law at Leicester University and a career in the City of London spanning 30 years Stephen joined Pett Franklin as the third partner in the team on 1st December 2013.While practising in the City, Stephen trained at Slaughter and May working in their tax department for seven years after qualifying across a range of tax matters but particularly on employee share schemes. From there he joined Norton Rose to assist with building their employee share scheme practice. He joined Touche Ross (later, Deloitte LLP) in 1994 becoming a partner in 1999 until leaving Deloitte to join us on 1st December 2013.Throughout his career, Stephen has advised on tax with particular emphasis on employee share schemes and related remuneration issues. He has advised on both domestic and international issues and become an acknowledged expert on employee benefit trusts in their many...

William Franklin

William is an experienced share schemes practitioner. He is also a Chartered Accountant who is widely recognised as a leading adviser on the valuation, accounting and financial aspects of all forms of remuneration, incentive and employee share schemes. He is a member of the HMRC Employment-Related Securities & Valuations sub-group, contributes to Tolley's Guidance on Employment Taxes. William has considerable experience of determining and agreeing with HMRC the market value for tax purposes of shares in unquoted companies. As a physics graduate, he is also able to advise on IFRS2 accounting and some of the more arcane aspects of option pricing mathematics. Together with David Pett, he first developed the joint share ownership plan (JSOP). William previously worked for Pinsent Masons and Ernst & Young. He has been an active supporter of junior local cricket and...

Web page updated on 21/05/2026

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