Cerys Williams, Employment Partner at BDBF LLP, speaks to Liz Hunter, Head of Share Schemes at Mazars LLP about the key benefits of Employee Ownership.
The Government has abolished the tax benefits associated with employee shareholder status.
Probably the most radical reform proposed by the Government is the new ‘employee owner’ status, whereby employees will forfeit major employment rights (like unfair dismissal) in exchange for employees being given shares in their employer worth £2,000 or more. These shares will be sold back to the employer for a reasonable price and up to £50,000 worth of shares will be exempt from Capital Gains Tax (CGT) at the point of sale. This is due to come into force in April 2013.
In December 2012, the Department for Business, Innovation and Skills published its response to a consultation on how to implement the new ‘employee owner’ scheme, whereby employees will forfeit major employment rights in exchange for taking a stake in their business.. This is an unusually fast response from the Government who only announced the scheme at the conservative party conference in October 2012.