Fiduchi Employee Services team has a wealth of experience in the design, implementation and administration of employee incentivisation schemes for corporate clients globally. Our team of professionals can help you create the right flexible and tax-compliant structures to help reward, incentivise and retain key employees.
The administration of employee trusts plans can be a significant resource burden for an employer, mainly if there are regular events requiring action (new awards, joiners and leavers, participants wishing to buy or sell shares and more). Fiduchi is able as an experienced provider of employee trusts to relieve companies of this burden on a cost-effective basis by handling the following:
Fiduchi has expertise in the formation and management services in respect of trusts which may be resident either in the UK or in Jersey. A range of tax and other implications arise from the choice of residence of the trust and tax advice should be taken in all cases. For example, some types of schemes, such as the tax-advantaged Share Incentive Plans (SIPs) in the UK, are required by law to hold shares in a UK resident trust. Fiduchi can, therefore, provide independent trustee services to support such plans.
Employee Benefit Trusts (EBTs) are widely used by companies to attract and retain staff. They can both provide a range of advantages in structuring employee incentive arrangements and tax benefits for employers.
An EBT is a discretionary trust established by a company to hold cash, shares or other assets for the benefit of the employees of the company or group of companies. It is constituted by a Trust Deed which sets out the purposes and powers of the trustees.
Usually, the Trust Deed provides the trustees have discretion as to how the trust funds are to be applied. In exercising their discretion, they are required to act solely in the interests of the beneficiaries. The beneficiaries are usually all employees, former employees and their immediate families. Typically, in their decision making the trustees may take account of wishes expressed by the employing company.
One key reason to use an EBT is if the employing company is a private business, its shares may be difficult to sell in the absence of a (public) market. Thus, an EBT can act as an internal "warehouse" to hedge against future obligations arising from the granting of awards or to serve as an internal marketplace.
This enables participants of the company's share schemes a real prospect of realising the value of their shares in due course without having to wait for any form of corporate exit event such as a sale of the company. It also substantially enhances the perceived value of the shares by the participants, particularly where, as is common, share prices are determined at regular intervals by an independent valuer and communicated within the company.
An Employee Ownership Trust (EOT) is a tax advantaged arrangement which allows the owners of a company to sell a controlling shareholding to a specially designed trust, free of tax. It also allows the company to pay tax free bonuses to staff of up to £3,600 each per year. The trust must meet certain requirements designed to ensure that the company is owned and controlled for the benefit of the employees as a whole.
Often, the share price internal market is funded by regular contributions from the employer out of its profits. The trustees are then able to buy shares from leavers and recycle them to joiners, promotees and so on (often, on the exercise of share options granted by the company), as appropriate.
The legal ownership of the fund is held outside the employing company, and participating employees, therefore, enjoy the comfort of knowing that the funds are safe and administered by independent professionals whose actions are governed solely by the interests of employees generally. Additionally, the fund is held independently and protected against claims by creditors in the event of failure of the company.
Our experienced Private Wealth and Family Office teams are here to answer any questions you may have. With a wealth of knowledge and expertise, they will be able to advise you on right solutions to meet your needs. You can rest assured that core to the Fiduchi principles are how your interests should best be met.
Our experienced Corporate team are here to answer any questions you may have. With a wealth of knowledge and expertise, they will be able to advise you on right solutions to meet your needs. You can rest assured that core to the Fiduchi principles are how your interests should best be met.
Our experienced Funds team are here to answer any questions you may have. With a wealth of knowledge and expertise, they will be able to advise you on right solutions to meet your needs. You can rest assured that core to the Fiduchi principles are how your interests should best be met.
Our experienced Yachts team are here to answer any questions you may have. With a wealth of knowledge and expertise, they will be able to advise you on right solutions to meet your needs. You can rest assured that core to the Fiduchi principles are how your interests should best be met.
Our experienced employee services team are here to answer any questions you may have regarding all types of employee incentive plans. With a wealth of knowledge and expertise, they will be able to advise you on the best solution that meets your business needs.
