Under this proposal, companies would be allowed to offer shares exempt from capital gains tax worth between £2,000 and £50,000 in exchange for the individual surrendering certain employment rights.
The government will use the Growth and Infrastructure Bill to amend the Employment Rights Act 1996 to create this new employment status and the capital gains tax exemption will be included in the Finance Bill 2013.
The consultation period closes on 8 November 2012 with the proposal due to come into force from April 2013. Jemima Coleman is a member of the Employment Lawyers Association working party responding to this consultation so please contact her if you would like to contribute your view.
Separately, as part of the government’s wider consideration of the benefits of employee share ownership in the private sector, BIS has published its response to the Nuttall Review on employee ownership and, as a part of its response, a consultation paper on deregulating share buybacks, including draft regulations. Please see our corporate ebulletin for further information.