Corporate Nominee Services / Vested Share Accounts
A Vested Share Account (VSA) is a structure sometimes put in place to allow employees having received shares under a company share plan, to hold them in a convenient and inexpensive share custody account. It might be established by a company to facilitate its oversees employees who cannot trade their shares in their country of residence, or those who do not have an existing brokerage account.
If an employee elects to have their vested shares transferred to the VSA, HBOS EES (through one of the trading companies such as Halifax Corporate Trustees Ltd ) (the "Nominee") will hold them on their behalf and will handle all aspects of being a shareholder, saving them from the need to deal with share certificates or a personal brokerage account.
The VSA is established for the convenience of current company employees who wish to continue to hold their employer's shares. Neither the company nor the Nominee makes any recommendation as to whether or how the individual should deal in those shares, and they have no liability for the actions of employees in any share dealing. As the VSA is client sponsored, any leavers must remove their shares from the VSA.
Dividends
The employee will be able to share in the profits of their employing company by receiving dividends on the shares held in the VSA as and when they become payable. The Nominee will receive the dividends on the employee's behalf, who may elect either to receive them in cash (paid to their bank account in local currency) or elect to have the net cash re-invested in company shares. If re-invested, the newly acquired shares will be added to the VSA shares already held.
Annual General Meeting
The Nominee will arrange, when requested, to send the employee a copy of the Company’s Annual Report. In any event, the employee will be sent a form setting out the resolutions that are to be voted on by shareholders at the Annual General Meeting (or EGM), in order that they can exercise their voting rights.
Taxation
The Nominee will not notify any tax authorities of an individual's participation in a VSA, unless demanded by such an authority to do so. It is the employee's responsibility to inform their tax office of the relevant details in respect of their participation in the VSA (for example, income received from dividends). A sale of the shares from the VSA may result in a liability to Capital Gains Tax for the employee, based on any increase in the share value.
The Nominee of the VSA, is unable to provide tax or any financial advice. If the employee is in any doubt as to their obligations in respect of reporting to the tax authorities or their tax position in general, they should obtain independent professional advice.
Cost of Participation
The VSA is set up by the Nominee and funded by the company. Costs are typically only passed on to the employee for transactions such as share sales or transfers.
HBOS EES offer Vested Share Accounts / Corporate Nominee Services, as part of our share plan administration package. For more information, please contact us.
