Joint Share Ownership Plans (JSOP)

Key facts:
A JSOP scheme works alongside an employee benefit trust (EBT). The employee, jointly with the EBT, acquires an interest in a certain number of shares upon joining the JSOP. The EBT pays close to the market value of the shares, with the employee paying the (usually small) balance. Ownership of the shares is structured in such a way so as to give the EBT the original value of the shares as at the date of the award and the employee the benefit of any future growth in the value of those shares. No PAYE or National Insurance Contributions are payable on the employee’s gains.

As JSOP schemes are relatively new, there is a risk of a challenge from HMRC and changes in legislation.

Who can benefit?
Any employee can participate in a JSOP but may be deterred by the upfront cost of participation and the tax risk (if the value of the employee’s interest is not agreed by HMRC).