Geared growth arrangements ― where are we now?

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Employment Tax

Guidance

There are a number of equity schemes which companies offer to their staff to drive performance and to reward loyalty which are not government-supported. These are known by a variety of names, including: growth, flowering or freezer schemes and joint ownership arrangements. In the main they are used to deliver equity in a way which falls within the capital gains tax (CGT) regime rather than participants being subject to higher rates of income tax and NIC.

Very often companies will look to implement these types of scheme where traditional tax-advantaged employee share plans such as Enterprise Management Incentive schemes (EMI) ( see the Why use an enterprise management incentive (EMI) scheme? guidance note) or Company Share Option Schemes (CSOP) (see the Why use a company share option plan (CSOP)? guidance note guidance note) are not available. For example companies may be too large to offer EMI or have balance sheet assets in excess of the relevant limit. With CSOP, whilst there is no longer any prior approvals

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Karen Cooper

Partner at CooperCavendish LLP

Karen is an experienced employee benefits lawyer with more than 20 years' experience in advising companies of all sizes in relation to their employee benefit and remuneration issues. She trained and worked for leading law firms Baker McKenzie LLP and Linklaters LLP and spent three years as a remuneration consultant at Ernst & Young LLP. Prior to co-founding Cooper Cavendish, Karen headed up Osborne Clarke LLP's employee benefit practice for 15 years. Karen is a thought-leader and regularly speaks and presents at industry conferences and events. She is a member of the Small Quoted Companies Alliance Share Scheme Committee and the Share Plan Lawyers Organisation. Karen is also the author of a wide range of legal publications including the chapter on executive remuneration in Sweet & Maxwell's 'Corporate Governance', the chapter on employee share schemes in Jordan's Company Administration and she contributes regularly to Tax Journal, and Practical Law (PLC). She is ranked as a leading individual on employees share schemes in Chambers and Partners and was recognised in the 2015 International Tax Review Women in Tax Leaders (a comprehensive guide to the world's leading female tax advisers).

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