Share plans must be offered to short-term resident staff

Employers must invite all employees including those who are resident but not ordinarily resident in the UK (RNORs) to participate in sharesave (save-as-you-earn) schemes and share incentive plans (Sips) under the Finance Bill 2008, which is awaiting royal assent.

Currently, employers only have to invite staff who are UK residents to participate in all-employee share schemes but under the new legislation, every employee must be offered the chance to take part in the scheme even if they have come from abroad to work in the UK and intend to return to their country of origin.

Anne Croft, share specialist and counsel at law firm Linklaters, has been monitoring developments closely and explained that the legislation was not designed to increase take up of all-employee share schemes but was a knock-on effect from the legal changes reglating to the treatment of non-resident and domicile employees published earlier this year.

However, she said: “RNORs are not really interested in a UK tax exemption on share schemes, because they are most likely paying tax [elsewhere].”