Your employer has given you share options. Hoorah! But before you decide to exercise the options and sell the shares, you need to understand the tax implications. You might also need to help to invest the proceeds. Our tax advisers, accountants and financial experts are here for you.
First, you need to know what type of share option scheme you're in...
Cambridge technology businesses
Cambridge technology firms first started giving out share options in the mid-1990's, to ensure their scientists were fully committed to the success of the project. The largest such scheme was ARM - you might remember some employees acquired up to ten times their annual salary (or more) when it floated in 1998.
If you're an employee...
Coming into sudden wealth can be surprisingly stressful, and we've advised many people in this situation. Our deep experience in this situation means we can probably help you too.
Unapproved Share Options
If you're an employer, especially a small startup business...
You might like to use an Unapproved Share Option scheme because they are quick to setup and inexpensive to run.
If you're an employee...
If you're in an Unapproved Share Option Scheme, you will be liable to income tax when you exercise your options, whether or not you sell your shares.
EMI Schemes
If you're an employer...
We can help set you up an EMI scheme, including share valuations for HMRC and preparing all the legal documentation.
If you're an employee...
If you're in an EMI scheme, the good news is that you won't have to pay income tax on the proceeds, although you might have to pay capital gains tax.