RMH Associates
Business & Accountancy Services

Other Tax Notes

EMPLOYEE SHARE INCENTIVES
Company Share Ownership Plans (CSOP)
No tax charge when option granted under Inland Revenue approved CSO Plans.
Options not to be granted at less than market value not to be exercisable within three years.
Gains chargeable to CGT, unless in a PEP. Total value when issued not to exceed £30,000.
Approved SAYE Schemes Savings
Employees granted options to purchase shares with a maximum of 20% discount to market value.
Employees can save a fixed monthly amount of between £5 and £250 for three, five or seven years.
At the end of the savings contract a tax-free bonus is available.
 Employees use the proceeds of the savings contract, including the bonus, if they want to exercise the option.
If they do not, the proceeds are repaid in cash, tax free.
There is no tax or National Insurance charged on the discount or on the gain made when the option is exercised.
Share Incentive Plans (SIP)
Companies can give up to £3,000 worth of 'free' shares a year to each employee.
Employees can purchase up to £1,500 worth of 'partnership' shares a year.
This can be rewarded by the company giving up to 2 'matching' shares for each share an employee buys.
Employees can also invest up to £1,500 out of dividends from the plan shares in 'dividend' shares.
Your employer may include some or all of these elements in their plan.
Pension scheme allowances2007/20082008/2009
Permitted contributions -the higher of 100% relevant UK earnings or£3,600£3,600
Annual contribution allowance
(100% of salary up to…)
£225,000£235,000
Lifetime benefit allowance£1,600,000£1,650,000

Individual Savings Accounts (ISA)
Income and gains on ISA investments are tax free2007/2008
2008/2009
Overall maximum£7,000£7,200
Maximum in Cash£3,000£3,600
Maximum in Stocks and shares£7,000£7,200



Charitable Giving
Gifts of the following assets to charity qualify for income tax relief:
Shares and securities listed or dealt in on the UK Stock Exchange, including the Alternative Investment Market.
Shares and securities listed or dealt in on recognised foreign stock exchanges.
Units in an authorised unit trust (AUT).
Shares in a UK open-ended investment company (OEIC).
Holdings in certain foreign collective investment schemes - broadly, schemes established outside the UK equivalent to unit trusts and OEICs.
The whole of a beneficial interest in a qualifying interest in land and buildings.
Such gifts will be exempt from Inheritance tax and exempt from Capital Gains Tax on any notional gain made.
For Gifts made under Gift Aid, no minimum donation is required to obtain income tax relief.
Payroll Deduction Scheme - no limit.
Tax Shelters2007/082008/09
Enterprise Investment Scheme (EIS) up to£400,000£500,000
Income tax relief on EIS
20%
20%
Maximum amount for EIS carry back£50,000£50,000
Capital gains tax on EIS shares
£Nil
£Nil
Capital gains deferral by EIS investment
Unlimited
Unlimited
Venture Capital Trust (VCT) up to£200,000£200,000
Income tax relief on VCT
30%
30%
Tax on VCT dividends
£Nil
£Nil
Capital gains tax on VCT shares
£Nil
£Nil
Capital gains deferral by VCT investment
£Nil
£Nil
Golden Handshake max.£30,000£30,000