A share incentive plan (SIP) gives employees the opportunity to acquire shares in their employer or a parent company of the employer on a tax-efficient basis.
As SIPs are designed to be offered to all employees (rather than on a selective basis), they tend to be operated by larger listed companies.
If the statutory provisions are met and the SIP is correctly notified to HMRC, favourable tax treatment can result.
This subtopic comprises of notes detailing:
the income tax, National Insurance contributions (NICs) and apprenticeship levy treatment of SIP awards, and
the capital gains tax (CGT) treatment of SIP awards and the availability of a corporation tax deduction for the employer
A SIP gives employees the opportunity to acquire shares in their employer or a parent company of the employer on a tax-efficient basis. The legislative framework governing the SIP is mostly contained in:
Schedule 2 to the Income tax (Earnings and Pensions) Act 2003 (ITEPA 2003), which sets out how the SIP can be operated and the main conditions that have to be satisfied for the SIP to
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