Registration, self-certification and online filing of employee share schemes
In the last edition of the Ezine, we provided information about HMRC’s new online share scheme registration and filing, which was also discussed at Equiniti’s Employee Services Forum. We have received confirmation from a few companies that they have been through the process and completed their registration. However, there are still many others that haven’t yet completed this. Although the deadline is July 2015, we are keen that registration is completed well before then, before April 2015 ideally, when filing of next year’s tax returns will commence. The key message is that if existing schemes are not registered in time they will no longer be tax advantaged.
From 2015, annual return filing will be carried out online and paper forms will no longer be accepted. The new online templates are on the HMRC website and show that the questions have changed in some areas, which means there is now more information required. HMRC will be issuing further guidance about this, at which point we will be able to assess the impact of the changes.
UK tax advantaged SAYE plans (as well as other share plans) are exempt from Foreign Account Tax Compliance Act (FATCA) reporting. However, at maturity, if a trust is used to provide shares for employees exercising their option, the release of shares may require FATCA reporting. The use of trusts for employee benefit purposes and the release of shares to employees has been covered in the updated August 2014 UK FATCA Guidance Notes. The section on ‘Employee Equity Incentives’ includes the following:
In cases such as Employee Benefit Trusts, or other similar structures which do NOT maintain financial accounts, when shares are allocated and the trustee is directed as soon as reasonably possible to transfer the assets (to the beneficiary, broker, custodian etc), the Trust will not be treated as maintaining a Financial Account for the duration of time it takes to complete the transfer.
If this wording is also used in offshore FATCA Guidance Notes, it is likely that FATCA reporting will not be required from discretionary Employee Benefit Trusts used for share plans.
With standard settlement periods for share dealing moving from three to two days this month, we have reviewed our various employee share plan dealing services. T+2 settlement will be used for both SAYE and SIP dealing. Other employee share plan dealing services will continue with their existing settlement terms, varying between T+0 and T+10 depending on how quickly funds and shares can be delivered.
If you require any further information, please contact your relationship manager.
Ezine issue: October 2014