Employment Related Securities
Reporting deadline of 6 July 2021 for the year ended 5 April 2021
An employer company has an obligation to submit an annual Employment-Related Securities (‘ERS’) return to H M Revenue and Customs (‘HMRC’), if there have been reportable events in respect of ‘employment-related securities’ during the year.
What is an “employment-related security”?
The definition of ‘security’ is very wide but, most commonly, the securities in question will be shares in a company. ‘Employment-related securities’ are securities, or an interest in securities, acquired by an individual by reason of the past, present or prospective employment of themselves or another person.
Where a right or opportunity is made available by a person’s employer, or a person connected with the employer, directors, office holders and employees are deemed to acquire shares/securities by virtue of their office or employment, irrespective of the reason for the share acquisition.
There is an exception to this where the right or opportunity is made available by an individual in the normal course of a domestic, family or personal relationship with the employee and not by reason of employment. This will usually cover instances where shares are transferred to spouses or shares are transferred to children as part of a family business’ natural succession.
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