The Falkland Islands Company has announced the expansion of its tax efficient share plan (Share Incentive Plan or SIP) which is open to all its 180 full time employees. The company believes in share ownership by staff and the public company status of its parent company, Falkland Islands Holdings plc (FIH), allows local staff to benefit from this in a meaningful way.
In addition to FIC’s long term Provident Fund scheme and annual bonus pool, this new SIP will provide a tax efficient way for staff to acquire shares with the added benefit that the company will add a bonus of an extra 33% of shares at its own cost.
In the past many FIC employees have subscribed to its Share Option schemes and this scheme will further boost the number of staff members that have a direct interest in FIH shares.
FIH Managing Director, John Foster said “I am delighted with the continued expansion of the SIP scheme , share ownership by staff is a very important way in which local people who work for FIC can share in the success of our company”.
From April 2014, the UK and Falkland Tax Authority has increased the limits employees may contribute into Share Incentive Plans (SIPs). The limit of Partnership Shares, contributed by employees, has increased to £1,800 from £1,500 per annum.
In November 2012 FIH created an employee share incentive plan (SIP) which is available to all permanent full time and part time employees across the Group. The SIP provides FIC employees with a tax-efficient way to invest in FIH shares.
The key benefits to joining the SIP are the tax effective purchase of shares, effectively using the money, which would have been paid in tax, to purchase additional shares, therefore allowing employees, to purchase shares at a substantial discount. In addition, for every three shares employees purchase, FIH will give them an additional share for free.
As well as being a shareholder in the Company, the key benefits to joining the SIP are the tax savings it offers. Contributions to the SIP to buy “Partnership Shares” are made out of gross pay, so they are not subject to income tax or MST contributions. This means it effectively costs employees less for their FIH shares than it would if they buy the same shares on the open market.