Let's start at the beginning. It was introduced in the Finance Act 2000. As at June 2004 there were 590 Plans approved by HM Revenue & Customs with varying plan designs to suit the individual objectives unique to each company. That's because unlike the traditional employee share plans, SIPs have flexibility as part of their design brief. This re-enforces the need to understand what you want from the plan from the beginning.
The Share Incentive Plan more commonly referred to as the SIP, can offer your employees a combination of four types of shares:
|
Share type |
Maximum amount for Share Purchase |
|---|---|
| Free | £3,000 |
| Partnership | £1,500 |
| Matching | £3,000 |
| Dividend | £1,500 |
| Total | £9,000 |
How your SIP works is determined by what suits your company best. For example, you can offer all, or a combination of the above share types and on a variety of frequencies. You can change your plan design year on year to meet the differing needs of your company objectives.
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