Benefit effectively from your benefits
As an Executive, an enticing benefit of your important position is that you may receive employment bonuses in the form of Executive Shares and Options. These benefits can be extremely valuable, however there are many issues to consider and manage to ensure you maximise the after tax benefits of the program.
Executive Share Benefits
Executive Share Benefits can come in a variety of forms. These include shares, restricted stock units (RSUs) or options. While shares are relatively straightforward, RSUs and options can be complex, and decisions with significant implications are usually required at the time of issuance, vesting or exercising. Our highly experienced team can help you work through these complexities so that you can make sound decisions that maximise your long-term wealth creation benefits.
Important Considerations
The following questions are important to address at the time that you receive a new issuance or decide to sell a current holding in Executive shares:
- Do I have an over exposure to a specific share or holding – will I be adequately rewarded for the additional risk associated with large holdings?
- Do I understand my options in relation to key decisions that I can make at the time of grant, which may impact on the ultimate level of taxation that I will pay – should I consider making a 139E election?
- Do I understand the concepts inherent in the ‘vesting period’, ‘exercising’ and the ‘sale’, and the resultant tax implications that may occur at each stage?
- Do I understand the various funding arrangements that may be available to fund the exercising of options grants?
- Do I understand my options for protecting any over exposure that I may hold in a specific share and or any major exposure to a specific currency in the case of international shares?
- Have I received Executive Share benefits while offshore and do I understand the special taxation rules that apply to the benefits received offshore?
Benefit from Our Experience
If you are unsure of your position on one or more of the above issues, then you may benefit from the strong technical and strategic knowledge that we hold in this area. We will map out a program that ensures your exposure to these valuable holdings remains appropriate and that the level of risk being taken is not excessive. The program will also allow you to progressively divest your holdings in a tax effective manner over time.
You may have sound reasons for maintaining your existing exposure and we can help you implement strategies that enable you to protect your portfolio valuation while you maintain your preferred exposure.
The timing of when you exercise and divest the holdings can have a significant impact on the resultant tax liabilities that you may pay. We can help you understand the tax implications and identify strategies to reduce the liabilities.
The taxation treatment of Executive Shares and Options is a complex area and one subject to legislative change. We can work with your preferred taxation adviser or facilitate the introduction to an expert taxation adviser in this area. This will ensure that the advice and strategies that you implement are fully integrated.
