Employee Share Schemes Budget 2011 Notes

    View Authors March 2011

    BUDGET NOTES - EMPLOYEE SHARE SCHEMES AND “DISGUISED REMUNERATION”

    The 2011 Finance Bill will include the detailed legislation to implement HMRC’s attack on “disguised remuneration”. Draft legislation on this subject was published on 9 December 2010 but this was extremely widely drafted and, if enacted in that form, would have reclassified many normal employee share schemes as tax avoidance arrangements.

    The draft legislation introduces the concept of the “earmarking” of assets for the benefit of employees and therefore there are particular dangers for employers that use employee benefit trusts to hold shares for use in employee share schemes.