Form 42 share plan reporting


All companies that operate employee share incentive arrangements in the UK (other than HM Revenue & Customs (HMRC) approved incentives), or that have directors or employees who simply acquire shares in the company, must complete an annual tax return, Form 42, by 6 July 2011. Failure to meet the obligations may result in significant penalties.

Who needs to file a Form 42?

The following entities must file a Form 42 with HMRC:

• The employer (whether a UK or an overseas company)

• The person who awarded the securities or options (e.g., employer benefit trust), or

• The person who issued the securities or options (e.g., parent company)

Usually, the UK employer discharges the reporting obligation on behalf of the corporate group.

Please see full article below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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