It is becoming increasingly popular for high growth start-ups to offer their key staff with performance related shares and securities. This serves two purposes, it gives a stake to key employees and incentivise them to work harder to increase performance to increase share price and benefit from the increased pricing.
The most common of the employee related shares and securities are the restricted stock units RSU’s and share options.
These are taxed differently depending on the agreement and underlying performance targets.
If you are required to complete your tax return, complete your tax return with tax expert for RSU & stock options.
As the name suggests, restricted stock units RSU are shares granted to key employees typically senior level executives to reward them staying with the company for longer term and be efficient enough so they can earn the most by the increase in value of their stock.
The shares are issued and vest (available to employee) during fixed duration of their employment. They could receive further shares as per their contract to keep them interested and engaged in company’s success.
There are taxable consequences and reporting requirements to HMRC. Depending on an employee’s circumstances a tax return may be required to declare and report income and income tax payable.
We are experts in restricted stock units RSU, get in touch with us and we will get your tax return taken care of.
Share option is another tool at owner’s/stakeholder’s disposal to incentivise key employees and executives.
Share options are a rights given to shareholder to get shares at a lower price at a certain date provided they full fill underlying conditions of performance targets.
You may need to complete a tax return to declare the additional earnings to HMRC.
Please get in touch with us to get your tax return started.
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