Good news about share reporting requirements

CMS Cameron McKenna has previously expressed concern about the wide scope of the reporting obligations relating to share acquisitions by reason of employment. For example, reporting obligations can arise in the context of a rights issue, bonus issue or takeover and in the context of former employees. On 8th March, the Inland Revenue published new guidance notes on reporting obligations. That guidance note contained the following statement:

"It remains our view that where the acquisition of shares/securities is made available, or deemed to be, by reason of employment, the shares/securities are employment-related and reportable, including rights issues, bonus shares and shares independently acquired by employees. We have, however, been considering the records/information on employees, who independently purchase shares, to make a full and complete report. In the case of rights issues, bonus shares and shares simply independently acquired by employees, where:

• the employer is a company or part of a group listed on a recognised stock exchange, and
• the opportunity to acquire shares/securities is made available to all shareholders, including employee shareholders, and
• the shares/securities are acquired independently of the company, for example, through a broker at full market value on the open-market,

then no report of such options or shares acquired by employees need be made. This relaxation does not apply to company directors of such employers, who are required to maintain records of their shareholdings."

If you would like more information please contact Mark Nichols on 020 7367 2051 or at [email protected] or Alison Hughes on 020 7367 2862 or [email protected] or Toby Locke on 020 7367 2411 or [email protected] or Anika Chandra on 020 7367 3798 or [email protected] .