Key Employee Engagement Programme (KEEP)

Note

KEEP is available for qualifying share options granted between 1 January 2018 and 31 December 2023.

KEEP is a tax efficient share option scheme. Under the scheme, you will be given an option to acquire shares at a future date, at a fixed price.

You will not have to pay tax when you exercise the option, even if the shares have increased in value. There are a number of qualifying conditions.

Qualifying conditions

To qualify for the beneficial tax treatment, there are several conditions to be satisfied in relation to the:

  • share options
  • employees
  • company.

Conditions for share options

The option cannot be:

  • held for longer than ten years
  • or
  • exercised within the first 12 months of the grant date.

Conditions for employees

You must be a full-time (30 or more hours per week) employee or director throughout the exercise period.

You are not eligible to participate if you hold a material interest (more than 15%) in the ordinary share capital of the qualifying company.

Conditions for the company

Details of qualifying criteria and how the scheme operates is available in Keep Employee Engagement Programme (KEEP).

Taxation on grant of the KEEP options

You do not pay any tax on the grant of the KEEP options. Your employer will report details to Revenue on the KEEP options granted to you.

Taxation on exercise of the KEEP options

Any gains you make on the exercise of qualifying share options will not be subject to:

Your employer will report details to Revenue on the KEEP options exercised by you.

Assignment of KEEP options

If you assign your KEEP options to a third party they will no longer be eligible for tax relief. The assignment and subsequent exercise of the options must be dealt with as unapproved share option schemes.

Capital Gains Tax (CGT)

If you dispose of your shares, you may be liable to CGT. You must report this disposal to Revenue, even if no tax is due. Your employer will not deduct any tax or report the disposal for you.

When you calculate the chargeable gain, the amount you paid at the acquisition date is used as your cost of acquisition. You may be able to claim Revised Entrepreneurs Relief, if you satisfy the conditions.