We'll also set a temporary cookie to hide this notice.
The Free Share award is an award of ordinary shares in Babcock International Group PLC (Babcock). Each share represents a unit of ownership in Babcock.
You do not have to pay anything for your Free Share award, as it is being awarded to you automatically, subject to certain terms and conditions, which are set out below and in the Plan rules.
After 3 years, provided you’re still employed by the Babcock Group, you’ll receive the shares in your Free Share award.
What’s more, if Babcock continues to do well, we hope to offer more Free Shares each year, helping connect the dots between performance, culture and reward.
The Free Share award is part of the Babcock Colleague Share Plan (the “Plan”) - previously known as the Babcock Employee Share Plan. The Plan is a Share Incentive Plan (SIP) which provides certain tax benefits on shares awarded to you if particular requirements are met. It is regulated by HM Revenue & Customs (HMRC).
We’re working with MUFG Corporate Markets Trustees (UK) Limited who will act as the trustee (the "Trustee"). They will be responsible for the day-to-day administration of the Plan and hold any shares acquired by or awarded to you under the Plan on your behalf while you’re employed by Babcock.
All Babcock employees who joined the Company prior to, or on 01 July 2025 and are still employed at the date the award is made, will be eligible for a Free Share award. This includes fixed-term employees and employees on maternity or long-term sick-leave. It doesn’t include contingent workers, interns, non-executive directors or pension trustees (who aren’t employees).
You do not have to do anything if you wish to receive Free Shares. These will automatically be awarded to you if you’re eligible.
If you’d prefer not to receive Free Shares, you’ll need to submit an opt-out form by the date specified in your communication. You can find the form in the documents section of this page. Please note: no cash or benefit alternative will be offered if you opt out, as the purpose of this award is to give you a meaningful stake in Babcock's future success.
We’ll write to you to confirm how many Free Shares you’ve been awarded. We’ll set up an account on our share portal for you and send you your 11-digit investor code. With it, you’ll be able to log in at www.babcock-shares.com to view your Babcock shares anytime and track their value.
If you already participate in the Plan (where you buy partnership shares and receive matching shares in return), your 11-digit investor code will remain the same and will be sent to you as a reminder.
Whilst the Free Shares awarded to you under the Plan are held in trust, you’ll be able to direct the Trustee how to vote at the Annual General Meeting (AGM) of Babcock. If you’d like to vote you’ll have to notify the Trustee online at www.babcock-shares.com and they will vote on your behalf. You won’t be able to vote at or attend the meeting in person, unless you also hold shares in Babcock in your own name.
Babcock may pay out dividends on its shares from time to time. When that happens, the Trustee will hold onto any dividends on your behalf until there is enough money to purchase additional share(s) in Babcock with future dividend proceeds. This process is called dividend reinvestment.
You are free to sell your shares at the end of the three-year period, but there might be tax to pay. If you work in the UK, after 5 years your shares will be all yours, tax-free. To sell your shares, please log in to your online account at www.babcock-shares.com.
Your shares will stay in the Plan while you’re on leave. If you decide not to return to work, you’ll be treated as having left employment, and your shares will be handled as outlined in the ‘What if I leave’ question shown next.
We’d hate to see you go, but if you leave the Babcock Group before the end of the three-year holding period, you’ll forfeit your Free Shares, unless you leave under what HMRC defines as ‘Special Circumstances’. If you leave after the three-year holding period, your shares will be removed from the Plan and transferred to you. The Trustee will contact you to explain your options for any remaining shares, including any potential tax implications.
If you leave under what HMRC defines as ‘Special Circumstances’, you’ll be able to keep all of your Free Shares and gain early access to them without forfeiture or tax penalties, even if you leave before the end of the three-year holding period.
Special circumstances include the following:
The Trustee will transfer the shares over to your legal personal representatives upon production of the necessary documentation. The legal formalities are usually completed more quickly where a will has been made.
You’ll be treated like any other shareholder and receive the same value for your shares. You’ll keep all your Free Shares, even if held for less than three years. Tax treatment will depend on how long you’ve held them and the form of payment, with full details provided if such an event occurs.
There is no income tax to pay when you’re awarded Free Shares. The tax treatment of your shares depends on the length of time you leave the shares in the Plan and the reason for taking shares out of the Plan:
| Time you leave the shares in the plan from the award date | Selling the shares whilst remaining with Babcock | Leaving Babcock due to special circumstances* | Leaving Babcock for other reasons |
|---|---|---|---|
| Less than 3 years | Not applicable as shares cannot come out of the Plan for the first three years | No income tax or NICs on either Free Shares or Dividend Shares | Free Shares: Not applicable as all shares are forfeited. Dividend Shares: Income tax but no NICs |
| Between 3 and 5 years | Free Shares: Income tax and NICs due on the lower of the market value of the Free Shares on the award date and the date they come out of the Plan. Dividend Shares: No income tax and NICs |
No Income tax or NICs on either Free Shares or Dividend Shares | Free Shares: Income tax and NICs due on the lower of the market value of the Free Shares on the award date and the date they come out of the Plan. Dividend Shares: No income tax and NICs if the Dividend Shares have been held for three years |
| More than 5 years | No Income tax or NICs on either Free Shares or Dividend Shares | No Income tax or NICs on either Free Shares or Dividend Shares | No Income tax or NICs on either Free Shares or Dividend Shares |
* See FAQ "Leaving due to special circumstances" above.
As with salary, any income tax due on your Free Shares will be deducted by Babcock, or your employing company, from your pay under the PAYE (Pay As You Earn) system together with any NICs due. Where there is insufficient salary to meet the PAYE tax liability (for instance, if you’ve left employment) under the rules of the Plan, the Trustee may sell your shares on your behalf to meet this liability.
Where there is income tax due on the dividend shares it will not be collected through PAYE but rather you should report this via self-assessment and pay the income tax due, if any.
You won’t have to pay capital gains tax on any growth in value in your shares while they are held in the Plan. If you take your shares out of the Plan and sell them at a later date, you may have to pay capital gains tax on the increase in value from the date you took them out of the Plan.
The taxation information in this brochure is provided for general guidance only. If you’re unsure as to how to proceed, please contact an independent financial adviser. You should note that tax legislation may change, and revised legislation will take precedence.
The receipt of Free Shares will be considered to be additional income and could therefore impact any means-tested benefits (such as child benefit and universal credit) to the extent the additional income brings you over a relevant threshold.