SIPs are becoming increasingly popular with companies that want to engage their workforce and recruit and retain key employees.
[2] A participating employee can only take their Free Shares out of the SIP in the 3-year period from the date of award if they leave the company.
Income Tax and National Insurance may be payable on the market value of the shares at the date of removal, unless they leave due to injury or disability, redundancy, if the company or part of the business they work for is sold out of the group, retirement, or death.
In certain circumstances, prescribed by HMRC, there will be no Income Tax or National Insurance liability when the employee leaves the company, no matter how long the shares have been held in the plan.
If the employee opts to make a lump sum contribution, the Partnership Shares must be purchased within 30 days of the deduction from salary.
An employee can normally only take their Matching Shares out of the SIP in the 3-year period from the date of award if they leave the company.
An employee can only take their Dividend Shares out of the SIP in the 3-year period from the date of award if they leave the company.
In certain circumstances, prescribed by HMRC, there can be no Income Tax or National Insurance liability when the employee leaves the company, no matter how long the shares have been held in the plan.
For the employee SIPs provide the opportunity to invest pre-tax salary in the company they work for and become a share holder.