Employee shareholder status

Under these agreements, employees give up certain employment rights (including unfair dismissal rights, the right to statutory redundancy pay and the right to request flexible working) and can acquire shares worth between £2,000 and £50,000 with certain tax advantages (including an exemption for capital gains tax).

Although this sounds like a relatively simple concept, the implementation will be complex and requires companies to follow a procedure set out in the Growth and Infrastructure Act 2013 and take advice on employment law, company law and tax law. Most of this detail was set out in an article in Taylor Wessing’s Law at Work in May 2013.

Since then, the Department for Business, Innovation & Skills (BIS) and HM Revenue & Customs (HMRC) have been busy producing guidance on employee shareholder status and guidance on the tax treatment. This has answered some questions…

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