When an annual notification is needed for growth shares and how to file it.
You only need to tell HMRC about conditional growth shares if they have been awarded to employees or directors.
An annual notification needs to be made by July 6th following the tax year in which the growth shares were issued.
Once this has been submitted, if you have only issued Growth Shares to UK Employees or Directors and haven't issued any Unapproved Options (as these will be notified on the same scheme) we recommend closing the scheme if there will be no more issues. This will avoid the need to submit nil notifications in subsequent years.
Download the file template and view HMRC guidance notes on filling in the file here.
For the notification
Fill in the third sheet, Other_Acquisition_V3, linked above. Most of the questions are reasonably self-explanatory, but a few may need a little help:
2. As this is a bespoke scheme that you have put together not in the aim of tax avoidance, answer "no"
19. Enter "1" for shares
25. Enter "1" as they have restrictions
26. Enter "1" as they bear the risk of forfeiture, if the conditions are not met
27. Enter total vesting period, or best estimate if not specific
28. Enter nominal value of shares, as they have been set at a hurdle to make them worthless on award
29. Enter nominal value of shares, as they have been set at a hurdle to make them worthless on award
30. Enter "yes", if an ITEPA 431 was entered into on share award
31. If yes, then "all"
32. Leave blank
33. Enter aggregate nominal value of the shares
35. Enter "no"
37. Enter "no"
38-40. Enter "no"
Don't forget to close this scheme once you have submitted your notification if you have only issued Growth Shares to UK Employees or Directors.
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