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No fear! ‘Phantom’ shares

Shared from Tax Insider: No fear! ‘Phantom’ shares
By Mark McLaughlin, February 2024

Mark McLaughlin outlines an arrangement allowing a company’s employees to benefit from the growth and success of the business without owning part of it. 

Many company owners wish to incentivise and retain key employees by offering share option schemes through the company, or simply by arranging for the company to issue shares to those employees.  

Nice idea, but… 

However, some company owners may be put off the idea of employee shares diluting the value (and possibly the voting power) of their own shares. There may also be concerns about what happens if the employee leaves (or dies) while owning shares in the company.  

In addition, share schemes can be complex (e.g., potentially involving the creation of a new class of employee shares, scheme provisions for ‘good’ and ‘bad’ leavers, adherence to detailed legislation for

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