These Staff Share Options have been an excellent way for the Company to remunerate Staff and for those Staff to share in the medium-to-longer term growth of the Company.
The recent sale agreement for the Currencycloud business to Visa is leading to the crystallising of Staff Share Options. This process means that the corresponding amounts are being paid shortly (currently expected to be November 2021 pay) to Staff for the ‘exercise’ (meaning sale) of their Options as part of the business sale process.
The amount paid to an individual member of staff who is a Currencycloud Option Holder will be:
NB: where a large amount is paid, the usual tax level for the Option Holder may increase from say, 20% to 40%, or 40% to 45%. This makes considering a pension contribution, as mentioned below, potentially of particularly good value to Members.
The relative size of amounts being paid to Option Holders means that, for many, there will be significant tax deductions made against the amounts paid out.
The tax costs arising as a result of the profit payments to Option Holders can be reduced or even completely mitigated, though only over time through future payslips. This is achieved by way of making a pension contribution to the Option Holder’s Currencycloud pension scheme. This is implemented by payroll payments directly to the Option Holder’s Royal London Group Personal Pension (GPP).
A contribution that matches the profit on the Share Options would be possible over several monthly pay periods, whilst the Option Holder could use the money received from the share gain to top-up their living costs.
The advantages are further explained below, as well as supporting calculations being available via the links provided.
The pension scheme at Currencycloud operates the highly beneficial ‘salary exchange’ method of contributions and that the Company gives to member pension funds all of its saved Employers’ National Insurance Contributions (NICs) saving.
The value of this addition is considerable to Members. The Employers’ NIC rate is 13.80% of salary and so an Option Holder choosing to exchange their share gains over several pay periods will, in effect, enhance those gains by 13.80%.
From the above, it clearly makes good financial sense to invest as much of the proceeds of the share profits as possible into the pension, where possible, over time for the majority of Option Holders.
How much is actually possible to contribute will depend upon the pension allowance available to each Option Holder. In addition, the individual Option Holder’s personal financial circumstances as regards cashflow needs and any desire to have funds today, rather than invest for retirement.
Currently, the planned payroll month for the value of the Options to be paid is November 2021. However, please check with your HR Contact to be certain of the correct month.
You should confirm the details prior to the cut-off date for that (whichever relevant) month’s payroll. It is best to firm things up as soon as possible to avoid disappointment and lost tax benefit.
Implementing an additional contribution can be instructed as a one-off amount (as appropriate in this case) or regular amount at any time. The process is straight forward, as follows.
Step One – If your proposed additional contribution would result in you exceeding the Annual Allowance (click here for Pension Contributions Limits), or if you are a high earner, please contact our Employee Benefits Adviser, Chris Rathbone to discuss matters first.
You can reach Chris by email to: Chris@pattersonmills.com
Step two – having ensured that you have understood the recommended actions in Step One above, all you need to do is email Ralitsa Markova at Patterson-Mills and state the additional amount that you wish to contribute.
You can reach Ralitsa by email to: Ralitsa@pattersonmills.com
The amount to contribute should be the gross (before tax) amount and the tax amounts will be automatically reduced within your payslip calculation, as usual.
Please read through the additional information via the buttons below to make sure you have a thorough understanding of your options (no pun intended!).
Click here for Full Tax Calculation
Click here for Contributions Outside Payroll
Click here for Pension Contribution Limits
Handbook GPP – Currencycloud Staff v5.1
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