If you’re a US Company with UK operations or employees, it’s easy to see why you might be interested in implementing an employee share plan. The highest rate of income tax in the UK is currently 45%, whereas capital gains tax can be as low as 10% – so the tax benefits of share plans are obvious.

You can structure a scheme in a number of different ways. The question is which type of scheme works best for your company? In the UK you can either set up an ‘approved’ or an ‘unapproved’ scheme – the key differences are outlined in the table below.

How to grant the option under the scheme?

Click here to view table.

What types of schemes are available?

Click here to view table.

Advantages

Click here to view table.

Disadvantages

Click here to view table.

Tax implications

Click here to view table.

Are there any other employment tax or social security contribution issues? 

Click here to view table.