Company Share Scheme - Takeover Issues

grimerking

Hi,

I joined my company share scheme. I was allowed to buy £1500 per annum of shares. The company then matched this purchase with £1500 for 'free'.

This was tax deductible, so I only paid ~£900 for £3000 of shares. If I keep the shares for three years, then I have no additional tax liabilities.

However, my company is currently being bought by another company. I have received a letter from the share scheme holding company that states because I haven't held the shares for three years, I will have a tax liability for all the shares I have purchased.

Is this correct? I haven't left the company and the takeover is completely outside my control.

Does anybody have any experience of this?

Thanks,

Rob

grimerking

bump!

Is anybody able to help with this issue?

calypso_rhapsody

Well i believe that it depends what happened to your shares in the takeover - if you get cash then i think that is the right advice. If on the other hand you get shares in the new parent company then i believe that the tax reliefs should carry over to the new holding, subject to the same conditions.

I am not a tax expert and it is a long time ago that i used to deal with corporate take-overs but that is my recollection. Please don't rely on my advice but it may give you some questions to ask.

It would be normal for a company taking over another to seek to avoid creating tax liabilities for employees if they can or at least to create a situation whereby the staff will have the cash to pay the liability.