Should you give your employees shares in your company?

Many business owners consider employee share schemes as a means by which to motivate and align employees by giving them an ownership stake and share in the growth of the company. The rules around employee share schemes are currently being reformed, and if you are thinking about issuing shares to employees, it is important to understand that the reforms take effect from 1 July 2015. Any shares or options issued under an employee share scheme prior to 1 July 2015 will be subject to the current, more onerous rules whereas shares or options issued on or after 1 July 2015 will be subject to the new rules. See our prior post on employee share schemes for a summary of the changes to the taxation of employee share schemes.