Employee share schemes

On 19 October the ASB issued UITF Abstract 17 (revised 2000) ‘Employee share schemes’.

The revised Abstract includes the limited amendment that was proposed in June to deal with the appropriate ambit of the exemption for SAYE and similar schemes in the light of the introduction of new types of share scheme (in particular the all-employee share plan introduced by the Finance Act 2000). That proposal was supported by all those who responded.

The revised Abstract clarifies that:

• the exemption applies only to Inland Revenue approved SAYE and equivalent overseas schemes

• the exemption does not apply to approved profit-sharing schemes under the Income and Corporation Taxes Act 1988, nor to new types of scheme such as the all-employee share plan being introduced this year

• the exemption also does not apply where employees are given the opportunity on the occasion of the initial listing of the company to subscribe for shares or rights to shares at discount to the float price payable by public investors.

The revised Abstract also requires disclosure of the fact that a company has chosen to take advantage of the exemption if such is the case (but not quantification of the effect).

The revised Abstract is effective for financial statements relating to accounting periods ending on or after 22 November 2000.