Background
59.A new employment status, known as ‘employee shareholder’ status, has been established by the Growth and Infrastructure Act 2013. Individuals with this status will be known as ‘employee shareholders’. Employee shareholders will be issued or allotted at least £2,000 worth of shares in consideration of an employee shareholder agreement. Where the conditions set out in this Schedule are met, gains on employee shareholder shares will not be subject to capital gains tax when the shares are disposed of. There will be limits on the shares which qualify for this capital gains exemption, imposed by reference to the value of employee shareholder shares at the time they are acquired. In addition, for income tax purposes, employee shareholders will be deemed to have paid £2,000 for employee shareholder shares, subject to certain conditions set out in this Schedule. This deemed payment will be disregarded for various purposes relating to the corporation tax deduction available to a company when an employee shareholder acquires shares.
60.In addition, individuals who are considering adopting the new status must be provided with independent advice before entering into an agreement to do so. That independent advice must be funded or reimbursed by the employer and there will be no tax charges arising for the employee as a result.
