Share Incentives

In this issue: Tax treatment Corporate governance New content Useful information Dates for your diary Weekly highlights from other practice areas Tax treatment Reminder-Annual share schemes returns filing deadline is 6 July 2026 Companies that run either tax-advantaged or non-tax-advantaged employee share schemes where UK participants obtain shares or share-based awards must file an annual return online with HMRC for each scheme. For the 2025–26 tax year, the submission deadline is 6 July 2026, and a return can only be filed if the scheme has already been registered with HMRC. HMRC provides templates, guidance and technical notes setting out the details required. As each scheme type has its own template, care should be taken to select the correct version. Where a registered scheme has no reportable events during the relevant year, a nil return is still...

In this issue: New content Useful information Dates for your diary Weekly highlights from other practice areas New content Q&As Can an enterprise management incentives (EMI) option be structured to be exercised on an exit, whilst also empowering the board—subject to the approval of the shareholders—with additional discretion to permit exercise in other situations? Can EMI scheme rules be amended so that performance conditions are introduced for future option awards, without in any way disturbing options already granted? May a fully listed company lawfully issue EMI options, provided that the other conditions set out in Schedule 5 to ITEPA 2003 are satisfied? Is a company able to grant EMI options to employees who are based outside the UK?... ...

In this issue: EMI Q&As HMRC Manuals tracker Dates for your diary Weekly highlights from other practice areas EMI Reminder: Increased EMI thresholds and period for exercise now apply From 6 April 2026, higher limits and a longer exercise window take effect for most companies qualifying for EMI, following the Finance Act 2026 in practice......

This Practice Note monitors the development of UK legislation brought forward under the legislative programme linked to the UK’s departure from the EU. It also features a Brexit SI database that compiles details of both draft and made secondary legislation related to Brexit. Quick links Use the links below to go directly to the relevant section or tracker. Practice area trackers Follow the links below for trackers focused on Brexit legislation across specific practice areas: Commercial Corporate Crime Dispute Resolution Employment Energy Environment Financial Services Information Law Intellectual Property Life Sciences Local Government Pensions Property R&I Tax For further updates and guidance tailored to individual practice areas, see: Brexit collection......

Continuing obligations of an AIM company A company admitted to trading on AIM (an AIM company) is required to observe a set of ongoing requirements contained in the AIM Rules for Companies (AIM Rules), as issued by London Stock Exchange plc (LSE). Such a company should also take account of the AIM Rules for Nominated Advisers, which outline the duties and expectations of its nominated adviser, together with the AIM Disciplinary Procedures and Appeals Handbook in full. There are further applicable legal and regulatory regimes which include the Companies Act 2006 (CA 2006), the Financial Services and Markets Act 2000 (FSMA 2000), the Financial Services Act 2012 (FSA 2012), the City Code on Takeovers and Mergers (the Takeover Code), certain relevant sections of the Disclosure Guidance and Transparency Rules (DTR), and the UK Market Abuse Regulation (Assimilated Regulation (EU) No 596/2014). This Practice Note...

This Practice Note outlines the EU remuneration framework contained in the Capital Requirements Directive 2013/36/EU (EU CRD IV) and Regulation (EU) 575/2013 (EU CRR), together with the remuneration provisions in the Investment Firms Directive (EU) 2019/2034 (IFD) and the Investment Firms Regulation (EU) 2019/2033 (IFR). These rules apply to pay awarded by credit institutions and investment firms to their staff... Background and introduction to EU CRD IV and EU CRR In the aftermath of the 2008 global financial crisis, the Financial Stability Board (FSB) and a number of national regulators reviewed remuneration governance and structures across financial services. They concluded that: firms and supervisors underestimated how pay policies and practices could fuel excessive risk-taking remuneration design, notably cash-heavy, short-term incentives, promoted undue risk appetite bonus pool methodologies did not adequately reflect firms’ capital and liquidity costs or the risks borne ...

PART ONE—GENERAL PROVISIONS 1 Definitions and interpretations This Rule sets out the glossary for the Plan and how those terms should be read. Defined expressions cover, among others: Awards and outcomes: Contingent Awards, Restricted Awards, Matched Awards, Options and Cash Awards, together with Date of Grant, Option Price, Exercise Price, Market Value, Dividend Equivalent and the concept of Vesting; People and entities: the Company (acting through the Board or a duly authorised committee, which may include the Remuneration Committee), Eligible Employees, Participants (and their personal representatives), the Group and its Subsidiaries, Associated Companies, the Grantor, the Nominee, the Trustee and Trust, and HMRC; Timeframes and dealing: Financial Year, Dealing Day, Closed Period, Grant Period, Holding Period, Relevant Period and the Plan Period; Shares and schemes: Shares, Employees’ Share Scheme and Company Share Scheme, Invested Shares and Invested Share Amount, and Matched Awards...

This Agreement is entered into on [ insert date of agreement ] between the following parties: [ insert name of company ] (registered number [ insert registered number of company ]), with its registered office at [ insert registered address of company ] (the Company); and [ insert name of shareholder ] of [ insert address of shareholder ] (the Shareholder). Background (A) The Shareholder is the registered holder of [ insert number of shares ] [ insert class of shares ] in the Company. (B) The Company [ operates OR intends to operate ] the [ Insert the name of the employee share plan that the Company operates ] (the Plan), under which rights to acquire certain shares in the Company's capital [ have been granted OR will be granted ] by the Company. (C) The Company has asked the...

This Agreement is entered into on [ insert date of execution of the share option agreement ] Parties [ insert name of company whose shares are being granted under option ] (registered number [ insert registered number of company ]), with its registered office at [ insert registered address of company ] (the Company); and [ insert name of option holder ], of [ insert address of option holder ] (the Option Holder). Background As at the date of this Agreement, the Company agrees to grant the Option Holder an Option to acquire Shares on the terms set out in this Agreement. Upon exercise, the Company will satisfy the Option by transferring, or procuring the transfer of, Shares, or by issuing new Shares. The Option is not a tax-advantaged option. ......

Net settling a share award Net settling a share award is employed to cut down the quantity of shares a company is required to issue in order to discharge the award. Awards can, in principle, be net settled against both any exercise price due and any tax or National Insurance contributions (NICs) that arise. Key benefits of net settlement include reduced dilution for existing shareholders and the possibility for a company to stretch its headroom under any relevant dilution limits, thereby enabling those limits to accommodate more awards. Net settlement for tax and NICs means the company issues to the award holder a number of shares whose value equals the post‑tax amount they would have retained had they taken the full, gross allocation and sold sufficient shares on‑market to meet the pay as you earn (PAYE) and NICs obligations due at that point in time in...

The appropriate section of the HMRC annual return to complete hinges on whether the relevant share appreciation right (SAR) or restricted stock unit (RSU) constitutes a securities option for the purposes of s 420(8) of the Income Tax (Earnings and Pensions) Act 2003. In both scenarios, the award counts as a securities option if it grants a legal entitlement to obtain shares, and this, in turn, is determined in practice by the precise terms of the award concerning the method by which settlement may actually occur......

This Q&A proceeds on the basis that intended lowering of the hurdle attached to the growth shares is not one element of a pre‑arranged sequence of steps or a tax avoidance arrangement (for instance, where the plan from the outset was to grant the shares with a high hurdle and later reduce that hurdle to confer a benefit on employees). In that scenario, HMRC might effectively contend that the employment‑related securities rules are not engaged, and that employees are instead taxable to general earnings, by reference to the cases of PA Holdings Ltd v Revenue and Customs Commissioners and UBS AG v Revenue and Customs Commissioners......