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One form of tax-advantaged share scheme is a share incentive plan or SIP. A SIP is operated by trustees who buy or subscribe for shares with funds provided by the company (or, in the case of partnership shares, the employees) and appropriate them to the participating employees. There are various different types of shares within a SIP which are detailed in E4.528 onwards and can be summarised as:

1. Ìý

   •ÌýÌýÌýÌý free shares – an employer can appropriate to an employee free shares in the company valued at up to £3,600 per tax year without any charge to income tax

2. Ìý

   •ÌýÌýÌýÌý partnership shares – an employee can buy shares in the company out of amounts deducted from his salary up to a limit of £1,800 in any tax year or, if less, 10% of salary

3. Ìý

   •ÌýÌýÌýÌý matching shares – in respect of each partnership share an employee buys, the employer may appropriate to the employee up to two free 'matching shares', again without any charge to income tax at that time