When it comes to saving for you future, pensions aren’t the only option. You can also invest in share plans at work. This module will explain what different share plans are available and the differences between them.
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SAVING FOR YOUR FUTURE
Kingfisher Share Plans Equatex Portal
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UK telephone Number – 0808 2343577
Ireland – 1800 201087
Allotment
The process by which newly created shares are received by, or given to shareholders who have subscribed or applied for them.
SIPP (Self Invested Personal Pension)
This is type of UK Government approved personal pension scheme, which allows individuals to make their own investment decisions from the full range of investments approved by HM Revenue and Customs (HMRC). SIPPs are a type of Personal Pension Plan.
Approved Share Options
Share options approved by Her Majesty’s Revenue & Customs (HMRC).
Capital Gains Tax (CGT)
Tax paid on the gain of profit you make when you sell, give away or otherwise dispose of assets that you own such as shares.
Certificated
When shares are held in paper form through a share certificate. A share certificate is a written document and serves as evidence of ownership of the number of shares held.
Dividend
The distribution to shareholders from a company’s current period profit or its distributable reserves.
Dividend Shares
The dividends re-invested in plan shares on behalf of employees. These shares are often issued as part of a Share Incentive Plan (SIP) and are subject to a holding period of three years, during which employees will not be permitted to sell them unless they leave the relevant employment.
Exercise Period
Following the vesting period, this is the timescale during which participants can exercise their options. The length of this period will vary from plan to plan and should be set out in the plan rules.
Exercise
The process of arranging for options granted under an option plan to be paid for, enabling the shares under option to be transferred to the employee.
Grant
An issuance of an award such as a share option to selected employees. The grant may include certain conditions that will be set out in the plan rules.
Maturity
This term is used to describe the time it takes for a plan to mature/come to an end. For example, three, five or seven years.
Nominee
A company that holds shares in another company on behalf of investors. The nominee will be the name recorded on the register of members rather than those of the underlying investors.
Option Plan
A share plan which gives the employee the right, but not the obligation, to buy shares at a certain share price. When the vesting period ends these options can be bought at the pre-determined share price subject to the fulfillment of any conditions set out when the options were granted.
Options
The right, but not the obligation, to buy/sell shares at a fixed price.
Ordinary Shares
The most common class of share representing the owner’s interest in the company. They are voting shares excluding preferential rights.
Partnership Shares
Shares bought from an employee’s pre-tax salary, often issued as part of a Share Incentive Plan (SIP). If the SIP is HMRC approved, the shares bought are subject to a limit of the lower of £1800 per annum or 10% of the employee’s salary. These shares are free of income tax and National Insurance contributions provided they are held in the plan for at least five years.
Plan Rules
The rules that govern a share plan offered by an employer to its employees.
Share Certificate
A certificate showing how many shares a shareholder legally owns in the company. This is considered evidence of ownership and is a valuable document.
Share Dealing
Encompasses the buying and selling of shares.
