I’ve just been promoted and have been offered access to share scheme, but I don’t understand what this means for me.

Mandy has had a super successful year at work and has recently been promoted for her efforts. Part of her new remuneration package provides access to an employee share scheme; which Mandy doesn’t have much knowledge of and isn’t sure whether to participate in. It all seems quite complex and she isn’t sure if she can make an informed decision by herself.

After speaking with her partner, Mandy decides to make an appointment with an adviser at Treysta to talk through her options:

  • These schemes seem to vary considerably and it’s just not my world, can you help me to understand the structure of the one I’m being offered?
  • What are the pros and cons of participating in an employee share scheme?
  • What are the tax consequences of the scheme for me, will it make my tax returns much more complicated? If so, how can I deal with that?
  • Will I be getting a large tax bill when I receive my shares?
  • One of my work colleagues said they transfer their shares to a Family Trust, what is that and would it be useful for me?

Often, an employee share scheme can be an individual’s first contact with tax complexity. It’s tempting to try and muddle through because you may never have engaged a financial professional before. This can lead to simple errors that can be very costly or worse they can lead to issues with the tax office. Mandy immediately saw the value of getting advice and now:

  • Has a sound understanding of how the scheme operates.
  • Understands the tax implications of the scheme for her particular circumstances.
  • Is confident that she holds her shares in the most appropriate entity.
  • Understands what the share scheme can mean for her financially and has integrated that into a broader wealth creation strategy.

While Mandy has now improved her knowledge in this area she has no intention of becoming an expert, it’s not something that interest her. Going forward Mandy is relieved to have professionals that help her manage her finances on an ongoing basis. Between her financial adviser and accountant she knows her financial affairs are always going to be in good order, while she focuses on her career.

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