Employee Shareholder Status — opportunity for tax-free growth for employee shares

Since 1 September 2013, employers may offer employees a new form of employment relationship — that of ‘employee shareholder’. The new employment relationship was implemented by the Growth and Infrastructure Act 2013, which amends the Employment Rights Act 1996.

In essence, an individual who becomes an ‘employee shareholder’ will exchange some of their UK employment rights for shares (employee shareholder shares) in the business they work for.

Limited relief from income tax and National Insurance contributions (NICs) will be available on acquisition of the employee shareholder shares and an exemption from capital gains tax (CGT) will be available on disposal of those shares. The tax reliefs were introduced in the Finance Act 2013…

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