Sell Shares Acquired Through An Employee Share Scheme

So you’ve got shares through your company’s employee scheme. Great, but what’s next? Deciding when and how to sell these shares is a big move. After all, it’s your hard-earned reward; let’s make sure you get the most out of it.

Our team can help you sell your employee shares efficiently and quickly. You could have the money in just a few days so let’s find out how you can do it. 

How to Sell Employee Shares

If you have employee shares that are eligible to sell, then you can complete the sales process in just a few minutes. 

1. You’ll first need to complete our online share sale form. You’ll need to have your Securityholder Reference Number (SRN) available.
2. We may need you to complete an online ID check. This is standard industry practice and the details of which will be sent to you after you complete the share sale form. 

Once this has been completed we can sell your shares and transfer your earnings all within a few days. 

What is an Employee Share Scheme?

In Employee Share Schemes, you’re often granted shares or options to buy shares in the company you work for. It’s a common incentive tool used to motivate employees, reward you for your commitment and drive the company’s growth.

Employee Share Scheme Limitations

While there are lots of benefits to your company’s Employee Share Scheme, it’s important for shareholders to be aware of its potential limitations.

There are restrictions on when and how you can sell your shares. You might need to remain employed for a certain period before you’re allowed to sell. Also, some schemes require the achievement of specific performance targets before shares can be sold.

You also need to be aware that selling your shares may affect your tax situation and personal circumstances, and could potentially result in a capital gains tax liability. Always take time to familiarise yourself with your company’s specific scheme, understand its impact on your share ownership, and seek professional advice if needed.

Benefits of Selling Your Employee-Acquired Shares

Selling your shares acquired through an employee share scheme can offer you significant financial benefits, especially if the company’s value has substantially increased. This sale can provide you with an immediate cash influx, which you could use for major purchases, debt reduction, or investment in other companies or asset classes.

It also allows you to diversify your investment portfolio, reducing the risk associated with having a large portion of your wealth tied to your employer’s performance. If you’re planning to leave the company, selling your shares could prevent potential losses if the company’s fortunes decline.

Keep in mind that selling shares may have tax implications, so it’s advisable to consult a tax professional. Remember, understanding the tax benefits and potential pitfalls can help you make an informed decision.

Common Mistakes to Avoid When Selling Employee Shares

While there are lots of benefits to selling your employee-acquired shares, you also need to avoid common mistakes that could potentially diminish your financial gains.

One blunder is to sell without adequate knowledge of market conditions. Investors often make decisions based on emotions rather than facts, selling when the market is down and buying when it’s up. Try not to fall into this trap.

Another error is ignoring tax implications. Remember, any dividends or selling shares can lead to capital gains tax. Understanding how this affects your net returns is key.

Lastly, don’t overlook the impact of selling on your ownership stake. Selling large quantities could dilute your influence in the company.

Frequently Asked Questions

What Are Some Common Mistakes Employees Make When Managing Their Shares in an Employee Share Scheme?

Common mistakes you might make managing employee shares include not understanding the scheme’s rules, failing to diversify investments, ignoring tax implications, and making decisions based on emotions rather than market conditions.

Can I Sell My Employee Shares to Anyone, or Are There Restrictions on Who Can Purchase Them?

You can generally sell your employee shares to anyone. However, your company’s specific share scheme may set restrictions. You must understand these rules to avoid potential legal or financial issues.

How Does Participating in an Employee Share Scheme Impact My Overall Compensation Package?

Participating in an employee share scheme can significantly boost your overall compensation. It gives you potential equity in the employer company, aligning your financial success with the company’s performance. However, it’s dependent on share market conditions.

What Happens to My Employee Shares if I Leave the Company or if the Company Goes Under?

If you leave the company or it goes under, your employee shares may be affected. You’d likely lose unvested shares. For vested shares, you might have to sell or lose them if the company is bankrupt.

How Does the Performance of the Company’s Stock Impact My Financial Situation if I Participate in an Employee Share Scheme?

The company’s stock performance directly impacts your financial situation. If the stock performs well, market value of your shares increase in value. However, if it drops, your shares’ value decreases, potentially affecting your investment and overall wealth.