Company SIP and Tupe Transfer Rules

readwrite

Hi

I've been a member of my company share incentive plan for a little over 5 years, each month buying £75 of shares and receiving matching free shares.

Recently my employment has been transferred (TUPE transfer) to another company within the same parent goup of companies which has the same share incentive plan.

Within the share portal all of my shares have become 'available' to sell including the matching free shares which normally only become available to sell after 5 years.

If I was to sell the shares would I have to pay tax on the sale ?

From what I have read on the gov.uk website (not allowd to post links) because of change in employemnt under TUPE I won't have to pay tax, is this correct ?

The grey area is that I've transferred to a different company within the same group and a member of the same share incentive scheme, infact shares bought this month (after the transfer) and the corresponding matching shares appear in the same share account and are available to sell which obviously is not correct.

I would have expected the new company to open another holding for me and new shares placed in this holding.

What are the tax rules around SIP's and TUPE transfer to another company within the same group ? Should I now have two holdings, the old holding all available to sell and newly purchased shares going into new holding ?

Thanks

p00hsticks

readwrite wrote: »

Recently my employment has been transferred (TUPE transfer) to another company within the same parent goup of companies which has the same share incentive plan.

Are you sure it's a TUPE transfer ? I'm not an expert but have been through the process a couple of times and thought TUPE covered movement between two different owners, wherease it sounds as if both the company you are moving from and to have the same owner ?

readwrite

Yes definitely TUPE transfer, had the employee consultation etc, different pension scheme and different benefits.


The original company which I was an employee of was bought by the parent company about 10 years ago. I joined about 5 years ago and signed up to the share scheme and now transferred to a division in the parent company which operates the same company SIP.


We think capita who administers the scheme have made a mistake, well definitely in regards to the shares and corresponding free shares bought / awarded this month.


What I'm trying to establish however is if I sell all the shares (except for the shares bought this month) which a number of people in the scheme have done is whether I will be clobbered for capital gains tax at the end of the financial year.


The inland revenue advice on gov.uk states tax exemption where a TUPE transfer has occurred but I'm not sure if this applies for transfers between inter group companies in the same company share incentive scheme.

confuzzelled

Hi I was wondering if you found an answer to your question?

I have recently been discussing a very similar scenario with colleges regarding our own scheme. We work in services and TUPE comes around periodically as contracts end so our debate was focused on exactly what happens to the free matching shares in the event of TUPE.

My interpretation of the paperwork is that we will be able to remove all shares from the scheme including the free matching shares regardless of the length of time they have been in the scheme, however some colleges are convinced that any matching shares will not be available until after the 3 year period.

The information reads;

" If you withdraw any Partnership Shares within three years of their purchase date, you’ll forfeit the corresponding Matching Shares."

But also states under the "tax free leavers" section which TUPE is listed that;

"All your shares must be withdrawn from the SIP at the earliest opportunity but you won’t have any Income Tax or NICs to pay regardless of how long the shares have been held and you will not forfeit any Matching Shares."

Am I missing something?