Income tax on sweat equity held in trust IPO
I work as a consultant for a new company currently going through the process of listing on the Stock Market (it's a start up). The company is Singaporean, and is listing in Canada (hence the $ used). I work as a consultant but will become an employee post listing. I bill the company through my own consulting company registered as a limited Co in the UK.
When I joined the company, we had no assets and each share had a nominal value of $0.01. I was issued 50,000 shares upon successful seed capital raise which was completed at $0.2. So these 50,000 shares had a value of 50,000* x $0.2 = $10,000.
Upon successful IPO, I will be issued a further 200,000 shares, the IPO price will be at $0.35 so these shares will be worth 200,000 x $0.35 = $70,000.
The shares are held in trust whilst I determine the best way for them to be issued to me. I can either have the shares issued to me directly or my consulting company (I am sole director). It's worth noting the shares are in escrow for 12 months.
So my questions are:
How does the HMRC view these two trances of sweat equity?
Will I have to pay income tax on the 1st $10,000 and on the 2nd $70,000?
Does the escrow have anything to play in this, because whilst technically own them,I cannot realise them until the escrow is over?
Is it better to be issued to me or my company?
What happens if the shares drop in the 12 months they are in escrow, will I have to pay tax on something that is potentially worthless?
I understand I will have to pay capital gains tax on any profit I make form the sale of the shares.
Once I have a better understanding myself, I will seek in-person profession advice, but I am hopeful someone on here can help so I have some idea first.
Many thanks, happy to elaborate if is it helpful.