Edit: Advice from the moderators. Do not get involved in a growth share scheme. They are bad things. To understand why, read the responses below this post.
Hi Everyone
I've scoured through the boards and can't find anything specific to this topic, apologies in advance if I have missed anything.
I am looking for information on the use of growth share schemes used by umbrella companies to make use of capital gains allowance to reduce tax liability. I know if something seems to be to good to be true it usually is, but using growth shares is a legitimate practice and I'd like more info, so any information from those familiar would be welcomed.
Info I have received from the provider is as follows;
The growth share scheme involves paying taxes on 100% of your income and making a full declaration to HMRC through your self-assessment. You have the salary and your employer offers a Growth Share plan as an incentive the proceeds of which incur a CGT liability. There is no loan or advance in play.
The contract of employment is mutually agreed with the Umbrella company and the salary can be set at a level you feel comfortable with, but must be at least £425.00 per week to comply with the minimum wage requirement. PAYE and NI are calculated and deducted from these figures and paid across to HMRC keeping you up to date with all statutory deductions.
Once this part has been completed, the remaining amount is transferred into a Growth Share plan which is a method of employee benefit used by businesses throughout the UK.
Growth Shares allow gains to be taxed as Capital in the hands of participants and are used as a tax efficient alternative to options, this also enables the use of an individuals £12,300.00 annual exemption, and the lower 10% and upper 20% rates of CGT.
Hi Everyone
I've scoured through the boards and can't find anything specific to this topic, apologies in advance if I have missed anything.
I am looking for information on the use of growth share schemes used by umbrella companies to make use of capital gains allowance to reduce tax liability. I know if something seems to be to good to be true it usually is, but using growth shares is a legitimate practice and I'd like more info, so any information from those familiar would be welcomed.
Info I have received from the provider is as follows;
The growth share scheme involves paying taxes on 100% of your income and making a full declaration to HMRC through your self-assessment. You have the salary and your employer offers a Growth Share plan as an incentive the proceeds of which incur a CGT liability. There is no loan or advance in play.
The contract of employment is mutually agreed with the Umbrella company and the salary can be set at a level you feel comfortable with, but must be at least £425.00 per week to comply with the minimum wage requirement. PAYE and NI are calculated and deducted from these figures and paid across to HMRC keeping you up to date with all statutory deductions.
Once this part has been completed, the remaining amount is transferred into a Growth Share plan which is a method of employee benefit used by businesses throughout the UK.
Growth Shares allow gains to be taxed as Capital in the hands of participants and are used as a tax efficient alternative to options, this also enables the use of an individuals £12,300.00 annual exemption, and the lower 10% and upper 20% rates of CGT.
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