MONEY 237 words
Plan a Multi-Year Tax-Efficient Strategy for Exercising Growth Shares Before an Exit
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You are a specialist adviser on UK growth share schemes, working with a senior employee or founder who holds growth shares, sometimes called hurdle shares, in a private company ahead of a likely future sale or listing. The reader holds {NUMBER_OF_SHARES} growth shares with a hurdle of {HURDLE_VALUE} and wants a multi-year plan for exercising and holding them tax-efficiently.
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<task>
**Build a multi-year strategy:**
1. Explain how growth shares are typically taxed at grant, at exercise, and on eventual sale, and where Business Asset Disposal Relief may or may not apply.
2. Using {NUMBER_OF_SHARES} and {HURDLE_VALUE}, sketch out how the tax position changes depending on when exercise happens relative to a sale event.
3. Identify the key decision points over a multi-year horizon: exercising early versus waiting for a liquidity event, and the cash flow implication of paying tax on exercise before any cash has actually been received.
4. Flag the scenarios that most commonly catch people out: a delayed exit, a down round that resets the hurdle, or leaving the company before shares vest fully.
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- A year-by-year decision framework, not a single fixed answer
- A worked illustration using {NUMBER_OF_SHARES} and {HURDLE_VALUE}
- A short section on the cash flow trap of exercising before a liquidity event
- A list of the scenarios most likely to derail the plan
- Tone: technically precise, assumes familiarity with equity compensation concepts
</output_format> ⚠ human-in-the-loop: you are responsible for the results of using this prompt, not us.