BT faces a challenge in communicating to some staff their potential capital gains tax liability because the firm’s share price has risen dramatically since its sharesave scheme launched.
The scheme, due to mature in August, had an option price three years ago of 68p, compared with the current share price of about £2.15 (9 March 2012).
Employees will be able to minimise their CGT liability by transferring a proportion of their shares to a spouse or into their employer’s corporate individual savings account (Isa). A maximum of £0,680 worth of shares can be transferred into an Isa and be free of CGT.
Addressing delegates at the Employee Benefits Pensions and Workplace Savings Summit 2012, Francis O’Mahony, head of employee share plans and share registration at BT UK, said: “What I don’t want is an employee coming back to me and saying ‘why didn’t you tell me that I would have to pay[CGT]? I have already spent the money on my daughter’s wedding or university education or the holiday of a lifetime’.”
BT’s 2011 employee survey showed that 73% of its staff who take part in a share scheme have said they are consequently more interested in the organisation’s business performance.
BT offers several share schemes, including a sharesave with three- and five-year saving periods, partnership shares and a share incentive plan. It also offers free shares in 60 countries, executive plans, and a share purchase plan for US staff. The 2011 employee survey showed 94% of employee shareholders were satisfied with the application process for their share schemes.
O’Mahony said clear communication was essential to engage employees with share schemes. BT promotes its schemes in a number of ways, including personalised emails, webcasts, podcasts and online discussions.
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