Employee share schemes: dealing with leavers

Resource type: Practice note

Status: Maintained

Jurisdictions: England, Wales

This note outlines the issues to consider when an employee holding share options or other share awards leaves the company for any reason or dies. The issues considered include:

  • Determining whether the employee is actually treated as leaving under the rules of the relevant share plan.
  • Determining the reason for leaving (for example, injury, ill-health, disability, redundancy, retirement, dismissal by the company or voluntary resignation).
  • The effect of different leaver provisions in share plan rules, and the statutory leaver requirements for HMRC-approved share plans.
  • Interaction with employment law and HR processes, such as drafting a compromise agreement, and considering whether the leaver may claim compensation for loss of rights under a share scheme.

The tax and national insurance contributions ("NICs") implications of a share plan participant leaving the company or dying in service are dealt with in a separate note (see Practice note, Employee share schemes: tax and NICs issues for leavers).

Nicholas Stretch and Isabel Pooley, CMS Cameron McKenna LLP

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  • Resource ID: 5-207-3959
  • Products:  PLC UK Share Schemes & Incentives
  • This resource is maintained, meaning that we monitor developments on a regular basis and update it as soon as possible.
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