The various means whereby a company is able to arrange for its employees to acquire its shares have undergone numerous changes by the legislator (and in consequence presented numerous problems and opportunities for employers and their advisers). The legislation on share options, share incentives, savings-related share options and approved share options, share incentive plans and enterprise management incentive schemes are now contained within ITEPA 2003.
From 6 April 1999, there is no NIC charge on grant, but the gain on exercise is deemed to be earnings (see below). There is also no NIC liability where the unapproved option is not a readily convertible asset and it is over shares which were not themselves readily convertible assets. The intention of these rules seemed to be to encourage employers towards approved rather than unapproved schemes, although these may not have been commercially desirable or, in the case of companies owned by overseas parents, practicable. The new share incentive plan in FA 2000 offered the same NIC advantages as existing approved schemes, but the legislation will take some time to affect a wide
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