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Employee Solutions Fiduciary Family Office Wills & Probate Succession Planning Employee Solutions Funds Advisory Media & Sports Corporate Solutions

Experts in providing long This article discusses how tax in sport and media term employee incentives and is a complex subject to manage and maintain succession planning. Our Employee Solutions team is highly experienced in providing a wide range of offshore employee benefit incentive schemes, which can help businesses recruit and retain personnel as part of an overall remuneration strategy. As the fiscal landscape constantly changes, new opportunities arise for more flexible structures to be put in place to benefit and continue to reward key employees. We can assist large corporates and small owner-managed companies to design and administer appropriate structures to meet clients’ needs. Tax efficient structures We pride ourselves on providing innovative and tax efficient structures. Amongst the structures we can offer are employee benefit trusts (EBTs), employee share option plans (ESOPs) and employer funded retirement benefit schemes (EFRBS).

Independence We can advise on all types of wealth management structures around the world and the benefits and challenges each structure presents. One popular wealth structure is an offshore employment company for employers with personnel moving around the world. A company established in a tax neutral jurisdiction can be a useful way of mitigating the employee’s personal taxation and building goodwill. The offshore company could do more than simply hold the employment contracts; it can undertake various other administrative functions including payroll. We work with a variety of businesses from large corporates to small owner-managed companies to design and administer appropriate structures to meet our clients’ needs.

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Employee Solutions Jargon busting Employee Share Ownership Plans (ESOP) An ESOP is a defined contribution employee benefit plan that allows employees to become owners in the company they work for. Under an ESOP plan, companies provide their employees with the opportunity to acquire the company’s shares at a reduced price over a period of time. Using a trust structure removes the need to cancel, issue or transfer shares as employees join or leave the company.

Long Term Cash Bonus Schemes This type of plan is formed as a method of providing an incentive to key employees over a period of time. These schemes involve an award of cash or shares to an employee dependent on them achieving certain performance targets. The awards can be retained in a trust and held until the employee’s targets are reached.

Phantom Share Option Schemes These flexible schemes are cash bonus plans with the bonus determined by the increase in the value of the company’s shares This articlesubject discusses how tax in sport and media to the option. No shares Employee Benefits Trust (EBT) are physically issued transferredand maintain An EBT is effectively a discretionary is a complex subject toormanage to the option-holder on exercise of trust, established as a tax efficient the phantom share option, meaning and flexible method of rewarding and incentivising key employees. An that the company’s share capital employer can make contributions to is not diluted. The company is also entitled to benefit from corporation an EBT rather than paying bonuses tax deductions. directly to the employee. The trust can act as a warehouse for the Share Matching Plans shares until such time an employee This is a tax efficient scheme becomes entitled to them, or as established to enable companies a mechanism of holding shares either to give or sell shares in the granted to employees in the long company to employees. The shares term. must be held by the employee for a period of time set by the employer, Employer Funded Retirement following which the employer will Benefit Schemes (EFRBS) generally match the shares held by EFRBS allow employers to provide the employee. Plans such as these a benefit to employees in a simple are formed as long term incentives and cost-efficient manner and for employees of a company and at the same time provide tax can be offered as a valuable asset advantages to the employer. Whilst of a benefits package. the changes to the tax treatment of EFRBS provide some of the Payroll Administration advantages, they continue to retain Company Plans certain benefits when tailored as The plan involves outsourcing part of a bespoke tax structure payroll services to a third party, removed. thus relieving the administrative burden on the company.

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15 Esplanade, St Helier Jersey, JE1 1RB Channel Islands T +44 (0) 1534 740 000 F +44 (0) 1534 740 074 Jersey | British Virgin Islands New Zealand | Singapore Switzerland | United Arab Emirates Hawksford Group (and Hawksford International) are the Registered Business Names of Hawksford Trust Company Jersey Limited which is regulated by the Jersey Financial Services Commission.

Talk to us If you would to find out more about Hawksford and the employee solutions we can provide, please do not hesitate to contact us.

Steve Robinson Director T: +44 (0) 1534 740270 E:

Steve Carr Associate Director T: +44 (0) 1534 740273 E:

Denize Mitchinson Trust Manager T: +44 (0) 1534 740142 E:

Please note: The information provided in this document is intended to be general information and serves as a brief outline of what Hawksford can provide. It is not to be relied on as legal or professional advice nor as an alternative to taking professional advice relating to specific circumstances. We exclude all liability whatsoever for any loss or damage arising or claimed to arise out of use or reliance on the information contained in this document. The information highlighted may or may not be suitable for an individual’s situation. We therefore strongly suggest that individuals make contact with Hawksford before taking action.

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