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Employee Shares for Rights

Posted May 2, 04:44 PM

By malcolm

After a turbulent passage through the House of Lords the new proposal for employee shares is on its way to the statute book.

Employee shares will attract two tax relief’s.
1. Shares of up to £2,000 in value will not attract Income Tax
2. Shares of up to £50,000 in value will not attract Capital Gains Tax

Employee shares attracting these relief’s can be given to employees in exchange for the surrender of certain employment rights, such as unfair dismissal, redundancy or training, once the legislation is in place.

This may provide a valuable opportunity to allow employees to take up shares in their employer company without tax issues which exist at present. In many small company organizations those employees most interested in such shares may not value the rights forgone very highly and may find this an attractive proposition.

The latest amendments to the legislation dictates that the employer must pay for independent legal advice to be provided to employees who want to take up these shares.

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