Earmarking Definition

GLOSSARY

Published by a ��Ӱ�� Pensions expert

What does Earmarking mean?

Earmarking provides a spouse with a share of a pension scheme member's pension rights on divorce. The spouse's share is paid when the member draws their benefits. Now called ‘attachment’; alternative remedies include sharing and reallocation (‘offsetting’).

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Disguised remuneration—the relevant steps

Disguised remuneration—the relevant steps This Practice Note focuses on the meaning of a 'relevant step'. One of the requirements set out in the 'gateway' to the disguised remuneration rules (in section 554A of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003)) is that 'a relevant step is taken by a relevant third person'. There are four main types of relevant step: • earmarking cash or assets, or holding them on behalf of someone, with a view to taking a later relevant step by or on behalf of the beneficiary or any other person • giving or transferring cash or assets to a person, or making or writing off a loan • allowing a person to use assets, as if they were their own, and • granting a lease of premises for a period of more than 21 years However, the employer or member of the same group of companies who acts as a trustee or takes steps in relation to an employer-financed retirement...

Disguised remuneration—the gateway

Disguised remuneration—the gateway Sections 554A–554AA of Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003) are referred to by HMRC as the ‘gateway’ to the disguised remuneration legislation (this is not a legislative term). Part 7A applies where the conditions required by these sections are met and the gateway has been passed through. This Practice Note refers specifically to the gateway tests to understand where such rules apply in respect of any schemes or arrangements which may appear to provide for remuneration without any immediate and obvious liability to pay tax on such remuneration. This Practice Note, and indeed the main case and close companies gateways described below, do not apply to circumstances where normal taxation rules apply as regards earnings. Main case gateway Broadly, ITEPA 2003, s 554A requires the following as a precondition of the treatment of a ‘relevant step’ for income tax purposes: • an existing employee or a former or prospective employee (A) of another person (B). Employee for these purposes includes office-holders...

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EMI share option scheme rules

EMI share option scheme rules Rules of the [insert name of company granting EMI options] enterprise management incentives Scheme 1 Definitions and interpretation 1.1 Definitions In this Scheme, except where the context otherwise requires, the words and expressions set out below will bear the following meanings, namely: Acquiring Company • has the meaning ascribed to it in paragraph 39 of Schedule 5; Agreement • means the agreement entered into by an Eligible Employee, the Company and, where different, the person which grants an Option, in such form as the Directors will from time to time determine; Closed Period • means a period when the Directors are prohibited from dealing in shares under the Market Abuse Regulation (Assimilated Regulation (EU) 596/2014) or any other regulation, act, guidance or code on transactions in securities which applies to the Company, including any share dealing code of the Company; Company • [name of company granting options] (Company No [insert registered number]); Control • has the meaning ascribed to it in Schedule...

Standalone unapproved share option agreement for a worker via an employer of record

Standalone unapproved share option agreement for a worker via an employer of record This Agreement is made on [insert date of execution of the share option agreement] Parties 1 [insert name of company whose shares are being granted under option] (registered number [insert registered number of company]) whose registered office is at [insert registered address of company] (the Company); and 2 [insert name of option holder] of [insert address of option holder] (the Option Holder) Background (A) The Company has agreed to grant to the Option Holder as at the date of this Agreement an Option to acquire Shares on the terms set out in this Agreement. (B) The Company will satisfy the exercise of the Option by transferring or procuring the transfer of Shares or issuing new Shares. (C) The Option is a not a tax-advantaged option. 1 Definitions In this Agreement, except where the context otherwise requires, the words and expressions set out below will bear the following meanings, namely: Contract • means the contractual arrangements...

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Can an EMI option be granted over existing shares?

Can an EMI option be granted over existing shares? EMI options are most commonly granted over newly issued shares, but there is nothing to prevent an EMI option from being granted over existing shares instead, provided that the shares meet EMI statutory requirements (see Practice Note: EMI—requirements for options—Shares over which an EMI option may be granted). As the EMI legislation requires that the option must take the form of a written agreement between the person granting the option and the employee, the relevant option agreement in these circumstances can either be: • between the EMI company and the employee—with the company acting as grantor and entering into separate arrangements with the relevant shareholder in order to provide shares to satisfy the option when it is exercised, or • between the individual shareholder and the employee—with the individual shareholder acting as grantor (often with the EMI company also joining as a party to the agreement). In this case, any governing EMI plan rules should...

Are there any disguised remuneration consequences of leaving shares to an employee under a Will?

Are there any disguised remuneration consequences of leaving shares to an employee under a Will? This Q&A considers whether the provisions set out in Part 7A of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003) apply in a situation where a shareholder has left shares to an employee, former employee or prospective employee in a Will. Until such time as the effect of ITEPA 2003, Pt 7A is subject to a definitive court ruling, the question of whether leaving shares to an employee in a Will is likely to have disguised remuneration consequences is uncertain. There is no definitive answer to the question and each case will be likely to revolve around the specific factual matrix in which it accrues. What is the disguised remuneration regime? The current legislation surrounding disguised remuneration is to be found in the widely drafted provisions found in ITEPA 2003, Pt 7A. Given the breadth of the drafting, it is correct to say that the legislation applies to many types of...

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European Parliament Committee votes to boost Net-Zero technology production

The European Parliament’s Committee on Industry, Research and Energy has voted through legislation intended to bolster the EU’s manufacturing output technologies needed for decarbonisation. The ‘Net-Zero industry Act’ sets a target for the EU to produce 40% of net-zero technologies based on National Energy and Climate Plans and to capture 25% of the global market value for these technologies. It also intends to deal with the challenges in scaling up manufacturing capacities in these technologies. MEPs also broadened the scope of the draft legislation to encompass the entire supply chain, and proposed a wider, more comprehensive list of technologies to be covered and updated periodically, most notably nuclear fission and fusion technologies, sustainable aviation fuels, and specific industrial technologies. The full Parliament will vote on the Act during the 20–23 November 2023 plenary session. When both the Parliament and Council of the EU have adopted their positions, talks on the final shape of the law will start.

Consumer group calls for fair application of carbon pricing in EU climate action

The European Consumer Organisation (BEUC) has published seven principles to help decision-makers as it calls for the fair application of carbon pricing in EU climate action. The principles include distributing costs fairly, assessing how carbon pricing affects different socio-economic groups prior to implementing decisions, being transparent about the use of revenues, and earmarking revenues to alleviate any burden of carbon pricing measures. The principles also include making carbon pricing a complement to sector-specific climates policies, not simply displacing CO2 emissions to other parts of the world, and ensuring consistency across all pricing measures.

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