HOW DOES IT WORK?
The KEEP scheme applies to share options granted from 1 January, 2018 to 31 December, 2023. The terms of the programme allow employers to award a bonus incentive to employees that is exempt from income tax, PRSI and USC. The only tax liability is Capital Gains Tax, which will be applied after options are exercised and then sold. The option to acquire is granted at the market value at that time. Ideally, the share price will have increased by the time options are exercised. In the first instance, the company and participants will be party to a written agreement that explicitly sets outs the key details – how many share options are to be provided and at what price. Options cannot be exercised within 12 months of being granted, but also cannot be held for more than 10 years. This 10-year window means that the terms of the scheme may continue to apply to active options up to the end of 2033. While qualifying companies are required to make annual returns to Revenue detailing options granted, exercised, assigned or released no prior approval is required to operate a KEEP.
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