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2015 Autumn Statement and Spending Review: key share schemes and incentives announcements
Practical Law UK Legal Update 2-620-5792 (Approx. 3 pages)
2015 Autumn Statement and Spending Review: key share schemes and incentives announcements
| Law stated as at 25 Nov 2015 • England, Wales |
On 25 November 2015, the Chancellor, George Osborne, delivered his Autumn Statement and Spending Review. This legal update summarises the key share schemes and incentives announcements.
On 25 November 2015, the Chancellor delivered his Autumn Statement. The key announcements most relevant to share schemes are:
- The government will introduce technical changes to the tax rules relating to tax-advantaged and non tax-advantaged employee share schemes in Finance Bill 2016. The changes are intended to provide more consistency. Specifically, changes will be made to clarify the tax treatment of internationally mobile employees holding employment-related securities and options. (HMRC indicated that it was considering introducing legislation to clarify the tax treatment of internationally mobile employees holding RSUs in ERS bulletin number 21, see Legal update, Taxation of RSUs and annual returns: HMRC's ERS bulletin number 21.) (Paragraph 3.24.)
- The government indicates that it will take action against users of disguised remuneration schemes who have not paid their "fair share" of tax. The government may legislate in a future Finance Bill to close down any schemes "intended to avoid tax on earned income". Where necessary, that legislation will take effect from 25 November 2015. (Paragraph 3.87.)
Other developments that may be of interest to share schemes practitioners include a new penalty of 60% of the tax due where arrangements are successfully challenged under the GAAR and confirmation that legislation on the taxation of asset manager performance awards will be introduced (but the consultation issued in July 2015 suggested that the proposed changes would not apply to rewards falling within the employment-related securities rules (see Legal update, July 2015 Budget: key business tax announcements: Consultation: tax treatment of fund managers' performance-related returns)). The government is also considering whether action is necessary to deal with the growth of salary sacrifice arrangements, and further changes to entrepreneurs' relief to deal with "contrived structures".
For information about the key business tax announcements, see Legal update, 2015 Autumn Statement and Spending Review: key business tax announcements, and for information about the key private client implications, see Legal update, 2015 Autumn Statement and Spending Review: key private client announcements.