Section 8C explained: Tax tips for employee share schemes
Employee share schemes are often introduced to reward, retain, or align employees with long-term business growth. However, under section 8C of the Income Tax Act 58 of 1962 (the “Income Tax Act”), these arrangements can create significant and unexpected tax liabilities for employees when equity instruments vest. This article explains how section 8C operates, what qualifies as an “equity instrument,” and why careful structuring of share schemes is essential to avoid punitive tax outcomes.
