The Spanish government is proposing to implement major tax reforms that will affect the tax efficiency of providing employee benefits to Spanish employees. The changes are due to come into effect on 1 January 2015 but some will have retrospective effect. The key proposals, which are subject to change as the legislation passes through Parliament, … Continue Reading
HMRC has announced that the settlement facility for employee benefit trusts (EBTs) will be withdrawn from 31 March 2015. The facility was offered from April 2011 for employers who set up EBTs that HMRC considers are caught by the “disguised remuneration” legislation introduced in the 2011 Finance Act. This was aimed at the use of EBTs … Continue Reading
When Sports Direct’s controversial new share plan was approved by shareholders earlier this month, we were still left with the burning question of how much of the very large potential pay-out was going to be allocated to the Executive Deputy Chairman, Mike Ashley. Sports Direct have announced a very unexpected answer – he will not … Continue Reading
The IRS has confirmed that stock-based plans of non-U.S. employers under which options and stock appreciation rights are settled in stock do not result in acceleration of income for US tax purposes. However, the ruling also confirmed that stock appreciation rights that may be settled in cash can result in acceleration of income for employees … Continue Reading
The U.S. Supreme Court’s decision in Fifth Third Bancorp v. Dudenhoeffer eliminates an ESOP fiduciary’s presumption of prudence in relation to the holding employer securities. Many have viewed this decision with horror. However, my perspective is that the “revised” pleading standards articulated by the court will actually be a significant silver lining for ESOP fiduciaries. … Continue Reading
Within the scope of employee equity participation in Germany, it has been controversial whether income from capital commitments is either partly or entirely to be taxed as employment income or a capital gain. In a recent decision, the German Federal Fiscal Court (Bundesfinanzhof, BFH) has now clarified that value derived from profit participation rights (Genussrechte) … Continue Reading
Written by Stephanie Pollet Awards of qualified free shares by companies in France are now subject to two new limits. There is a welcome increase in the proportion of share capital that can be granted as free shares but the spread of awards between employees is now restricted. The new rules came into effect from … Continue Reading
On 5 March 2014 the Australian Taxation Office released a draft ruling relating to the tax treatment of employee remuneration trust arrangements. In the past, the Commissioner of Taxation has issued various private tax rulings on employee remuneration trust arrangements which had allowed income tax deductions for employer contributions to employee remuneration trusts. Many of … Continue Reading
The parts of the UK Finance Bill relating to share plans came into force yesterday, finally implementing many of the recommendations of the Office of Tax Simplification in this area. The main thrust of the new regime is online registration and self-certification of plans and filing of annual returns, of which more details are given in … Continue Reading
In a somewhat last-minute announcement, HMRC have changed the way that they expect EMI options granted prior to 6 April to be notified. Rather than requiring that all EMI options are notified electronically from 6 April, regardless of their date of grant, HMRC now only require that EMI options granted after 6 April 2014 are … Continue Reading
Before the financial crisis it was relatively common for UK private companies to use partly paid shares to incentivise key members of staff. Under these arrangements shares were issued to recipients for market value by the company but the subscription price was left outstanding on the terms that it could be called up on the occurrence … Continue Reading
Just a quick reminder that if you have any forms relating to the notification of the grant of EMI options (on HMRC Form EMI1) to file, you should ensure that you get them to the Revenue by 5 April 2014 – so effectively by Friday of this week. After this, HMRC will no longer accept paper … Continue Reading
Today’s Budget was notable for the absence of announcements relating to employee share plans. So, despite the calls for it to be abolished, employee shareholder status lives to fight another day. This is perhaps not surprising given the enthusiasm George Osborne showed for the concept when it was first announced. As we have commented, ESS … Continue Reading
If your company operates one of the UK tax-advantaged share plans, you will probably already have heard that new “self-certification” rules are being introduced from 6 April this year, as we reported in our post when the draft Finance Bill was published in December. HMRC have still to announce their final word on the changes, … Continue Reading
On February 18, 2014, Institutional Shareholder Services (ISS) launched an updated and enhanced version of its governance and risk assessment tool for Russell 3000 companies – “ISS Governance QuickScore 2.0” (QS 2.0). Some of its new features include a new monitoring system that will be event-driven, whereby ISS will track certain regulatory filings (eg the … Continue Reading
In common with many countries, Germany generally taxes an employee stock option at the time the option is exercised, rather than at the time it is granted. After all, that’s when the value is realised. A recent decision of the German Federal Fiscal Court opens up the possibility of reducing the tax cost to employees … Continue Reading
We have changed the way you can access information about UK executive remuneration through the blog site. The Remuneration Tracker document has been replaced by a UK Executive Remuneration Resource Centre. The Resource Centre has all the information and links that you could find in the old Tracker document but we have taken the opportunity to … Continue Reading
The newly elected Australian Coalition Government has commenced direct consultations with interested stakeholders to review the taxation of employee share schemes for start-up companies, following significant public and political impetus for legal reform in this area. They have stated that they are committed to reforming this area of the law in order to assist start-up … Continue Reading
Fidelity has issued a reminder (as reported by The Independent) that it expects shares obtained through UK LTIPs to be retained for at least 5 years from the grant of an award, even if the award vests after 3 years. There’s nothing new in this (see our previous post), but it will be interesting to see how Fidelity takes … Continue Reading
NASDAQ has filed amendments to its rules on compensation committee composition. In a welcome move, the revised rules are closer to the more flexible rules adopted by the New York Stock Exchange. The changes come into effect immediately so NASDAQ companies that have already changed their compensation committee charter to comply with the changes NASDAQ … Continue Reading
Last month we brought you an evaluation of the controversial ‘two strikes rule’ (2S Rule) (found here) and how it has affected executive remuneration resolutions at this year’s AGM season in Australia. In our previous blog post we highlighted the number of ways in which the 2S Rule can be utilised by shareholders for reasons … Continue Reading
In July 2013, the UK introduced a new General Anti-Abuse Rule (GAAR) – a statutory rule that allows HMRC to counter abusive tax schemes. HMRC’s guidance on the GAAR, all 195 pages of it, makes it clear that the GAAR targets the three As – abusive avoidance arrangements (in this topic, it’s definitely the case that … Continue Reading
On October 31, 2013, shareholders of Oracle Corp. voted “no” to CEO and founder Larry Ellison’s pay package worth $78.4 million (which is actually down 18 percent from the $96.2 million package he received a year earlier for which he also received a “no” vote by Oracle shareholders) (see Oracle Form 8-K filing). Approximately 56.3 percent of … Continue Reading
The recent US court case of Sutardja v. United States has reinforced the advisability of issuing stock options with an exercise price at or above the fair market value of the underlying stock on the date of grant to US taxpayers. The decision is an important reminder that discounted stock options are a form of … Continue Reading