Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Plans definition

What does Plans mean? Describes the set of design and technical documents for a project. In practice, parties use Plans to mean the drawings and related information that describe the works and are relied upon for design, planning, procurement and construction. The term is not generally defined by statute or case law; its scope is fixed by the contract or licence. Plans means all plans, drawings, models, specifications, reports, design documents and any other materials provided by the Licensor for the purposes of the Project, in hard copy or electronic form, including (without limitation) CAD/BIM models, federated models, schedules, surveys, calculations, method statements, datasheets and...

UK CGT on LTIP‑derived shares: conditional awards, nil‑cost options, SARs and restricted shares; share identification rules, business asset disposal relief and reporting

Published by a LexisNexis Share Incentives expert

Practice notes

What is a long-term incentive plan?

As set out in the Practice Note: What is a long-term incentive plan?, the awards most frequently delivered under a long-term incentive plan (LTIP) typically comprise:

conditional share awards (often referred to in the US as restricted stock units (RSUs))
nil-cost options
share appreciation rights (SARs)
forfeitable shares, sometimes described as restricted stock

A brief summary outline of the likely capital gains tax (CGT) treatment on disposals of shares obtained on the vesting of each LTIP award type is set out below.

For more detail and background on the different award types available under an LTIP, see Practice Note: Structure of a long-term incentive plan—Types of awards for further guidance.

Please note that this Practice Note proceeds on the basis that, at acquisition of the shares or otherwise on vesting of the LTIP awards, the employee has been fully subject to income tax and, where the shares are readily convertible, national insurance contributions (NICs).

It therefore considers the CGT charges on subsequent gains realised after the employee has been taxed on acquiring the shares following the vesting of the LTIP awards...

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Jeremy Edwards

Baker McKenzie

Jeremy has 18 years' experience as an employee benefits lawyer and 2 years experience as a corporate lawyer. Jeremy advises on all aspects of employee share plans, executive compensation and the taxation of employees. Jeremy has substantial UK experience, including implementing plans for UK listed companies, advising on UK tax issues and dealing with share plans in the context of corporate transactions. Jeremy also has extensive experience in connection with the implementation of share plans globally and working with multinational clients....

Web page updated on 21/05/2026

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