A share incentive plan (SIP) is a UK government-approved, tax-advantaged employee share plan. For UK residents, it allows you to acquire company shares.
The types of shares depend on what your company offers:
- Partnership Shares are bought using your pre-tax salary—you can contribute up to £1,800 per tax year or 10% of your salary, whichever is less.
- Matching Shares up to two for every partnership share you buy.
- Free Shares which are just as they sound! They're given to you for free by your company. You can receive up to £3,600 per tax year.
- Dividend Shares are where the company pays you for the shares you hold in the plan. You can reinvest this money to buy more shares in the company or have it paid directly to you.
How SIPs work
Each month, your chosen savings amount is deducted from your gross (pre-tax) salary. That means the amount goes into the plan before you pay tax and National Insurance Contributions (NIC), which can be financially beneficial for you. Once you’ve held your shares for at least 5 years, you could receive the maximum benefits. SIP plans could enable you to build long-term savings for your future and achieve tax-free growth.
Fidelity Stock Plan Services, working with MUFG Corporate Markets, will perform administrative services on your behalf and will periodically send communications.
Enrolling in your SIP and opening your account
All you need to do is enroll during the enrollment period. Go to Fidelity NetBenefits to get started.
Tracking your plan value
The value is the potential share price growth and dividend income from the company shares that you buy or receive in a tax-efficient way. You can see the current value of your plan at any time by navigating to your Share Incentive Plan tile, which you can access via NetBenefits.
Understanding your taxes
The tax you pay depends on how long you hold the shares. Go to NetBenefits to find out more about how much tax you could pay. Use Fidelity's tax-planning resources to learn more about taxes.
Managing your shares
You can take your shares out at any time, but this could impact the taxes you pay and may also restrict what actions you can take—see your plan documents for more details. You can hold onto your shares, sell them, or do a combination of both, depending on your financial goals.
Support for UK residents
If you live in the UK and are looking for more ways to use your stock plan award, Fidelity International is a separate company that offers resources to help you in your journey.
Getting help
We'll stay in touch through the full life cycle of your plan and let you know when there's action to take. If you have any questions, contact MUFG Corporate Markets on 0333 300 1928. For NetBenefits support, contact Fidelity Stock Plan Services using the calling instructions. Representatives are available Monday to Friday and from 5 p.m. ET on Sundays. Our lines are closed on Saturdays and on holidays when the New York Stock Exchange is closed.
Your Stock Plan Resource Center
The Stock Plan Resource Center provides the help and education you need to understand how your equity compensation works, including taxes, and selling and managing shares.