Draft legislation published for employee share schemes
On 11 December 2012 the Government published a ream of draft legislation relating to employee share schemes. This draft legislation related to the provisions on the the Enterprise Management Scheme (“EMS”) and also on the provisions relating to approved employee share schemes generally.
Click here to read what an Enterprise Management Scheme is and here to find what employee share schemes are.
Enterprise Management Incentive schemes
It is well-known that entrepreneurs’ relief reduces the capital gains taxation rate to 10% on the first £10 million of gains in share price. Although there is normally a requirement that the “entrepreneur” must have at least a 5% shareholding for the relief to apply the Government has stated that the relief will be extended to all shares acquired when Enterprise Management Incentive options are exercised (without the need to hold 5%). However, the requirement that the shares should be held for 12 months still applies.
Approved employee share schemes
Provisions were announced relating to retirement, the takeover and sales of businesses, material interest rules, restricted shares and SIPs.