Posted on 1 November 2018
The Key Employee Engagement Programme came into effect last January to help SMEs to attract and motivate employees and to support the growth in capacity and performance of Ireland’s enterprise sector. Private businesses are faced with intense competition from multinational companies, who offer their employees attractive packages through profitable share schemes. The Minister for Finance, Paschal Donohoe, took steps to tackle this last year with the introduction of the Key Employee Engagement Programme (KEEP) share scheme, which helps support SMEs to compete for skilled staff.
However, as the Minister acknowledged, in his Budget Speech, take-up of this scheme was less than expected and he stated his intention of “taking early action” to address the issue.
The Finance Bill 2019 has now introduced a few changes to the KEEP incentive this year, which the Government hopes will make the Scheme more attractive.
- As originally introduced, the total market value of shares over which options could be granted could not exceed 50% of an employee’s earnings in any year of assessment. The Finance Bill proposes an increase in this limit to 100% of salary.
- The Finance Bill also replaces the limit on the grant of options over shares having a market value in excess of €250,000 in any 3 consecutive years of assessment, with an increased limit of €300,000, albeit this will be a lifetime limit. The €100,000 limit for any one year of assessment remains.
The €3,000,000 overall limit on the value of share options that companies can allot remains unchanged, and employees are not restricted from entering into future KEEP arrangements with future employers.
Gains released on the exercise of qualifying share options granted between January 1, 2018, and December 31, 2023, will not be subject to income tax, USC or PRSI. However, gains are subject to capital gains tax or disposal of shares.
The increases to the value of shares over which options may be granted is welcome, but it remains to be seen whether this will provide enough incentive for Companies to introduce KEEP schemes in their organisations.
For further information please contact Nicola McGrath, Corporate and Banking Partner
Posted on 31 October 2018
What is Constitutional Justice & Judicial Recusal?
Our right to constitutional justice is provided for by Article 40.3 of our Constitution whereby the State guarantees in its laws, to respect, defend and vindicate the personal rights of every citizen. Constitutional justice consists of two fundamental procedural rules which seek to provide fair procedures to persons living in Ireland in their dealings with the Courts and other public bodies: 1. the decision maker must not be biased; and 2. a person must have an adequate opportunity to present his/her case.
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