Share Incentive Plans (SIPs): UK lawyers’ checklist on implementation, eligibility, award structures, trustees, valuations and HMRC compliance (ITEPA 2003)

Published by a LexisNexis Share Incentives expert

Checklists

A share incentive plan (SIP) enables employees to obtain shares in their employer, or a parent company of the employer, in a tax‑efficient manner, under a statutory scheme.

The legislative framework for SIPs is found primarily in the following provisions:

Schedule 2 to the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003), which describes how a SIP can be run and the principal conditions that must be met for the SIP to be a ‘Schedule 2 SIP’;
ITEPA 2003, Pt 6 Ch 7 (ITEPA 2003, ss 488–515), which sets out the income tax treatment of shares obtained under a SIP.

For more general background and context on SIPs, see Practice Note: What is a SIP? Set out below is a checklist of the key matters to consider before establishing or operating a SIP. It proceeds on the basis that the SIP Trust Deed and Rules comply with ITEPA 2003, Sch 2. See Precedents: SIP rules and SIP trust deed.

Preliminary considerations

Is a SIP the most appropriate plan? See Practice Note: When is a SIP appropriate?
Who is going to be the trustee of the SIP Trust?...

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Jonathan Fletcher Rogers

Addleshaw Goddard

Jonathan is the head of Addleshaw Goddard's Employee Incentives and Remuneration practice, and advises UK and multinational clients on the design and implementation of share and cash-based employee incentive plans. He also advises quoted companies on corporate governance and disclosure issues in relation to remuneration. Jonathan is a regular speaker at conferences on executive remuneration and share plans more generally and has been recognised as a leading individual in employee incentives in Chambers and Partners....

Web page updated on 20/05/2026

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