Attracting, retaining and motivating the right people is one of the keys to growing a successful business.
Your own circumstances and goals will be unique, but we are adept at getting to the heart of what you are trying to achieve and recommending tax efficient solutions for you and your key people.
Among the solutions available are:
Growth Share Plans (GSPs)
A Growth Share Plan, or flowering shares, can be a powerful tool in attracting and retaining the talent required to maintain business growth. It provides the participants with the potential of sharing in the future growth in value of a company can be attractive where other tax advantaged share schemes are not appropriate due to the corporate structure.
A GSP is immediate share ownership and involves the creation of a new class of share capital which is designed to accrue value above a hurdle level. Typically, the current value of the company is locked into the existing share capital (hurdle value) and growth shares only carry a right to capital above the hurdle value. It is also possible for the growth shares to carry a ratchet whereby the shares are entitled to a greater proportion of proceeds in the event of sale proceeds being above certain levels. A GSP is not a tax advantaged scheme but is usually designed to reduce the upfront tax exposure by ensuring the initial value of the growth shares is as low as possible. The aim of the GSP is to motivate the participants to drive value above the hurdle level for the combined benefit of the participants and the existing shareholders.
Enterprise Management Incentive (EMI) Share Options
EMI is a great way of attracting, retaining and motivating key members of the team who are central to the growth strategy of a company and are the most popular share incentive arrangement for privately owned companies.
An HMRC approved share scheme can deliver considerable tax breaks to the participants and the implementing company. EMI is extremely flexible and is best used as a tool to lock in and retain talent in a way which can leverage return for all the shareholders. As with all share incentive arrangements, the effectiveness of the scheme design will ultimately determine the level of employee engagement and success, or otherwise, of the scheme.