Tax legislation for share plans set out

The government has published draft tax legislation around share schemes, which will be included in the Finance Bill 2013.

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This includes measures announced in, and following, the March 2012 Budget and the Autumn Statement announced in December 2012. It is open for technical consultation until 6 February 2013.

The measures include:

• Changes to enterprise management incentives: Extension of capital gains tax entrepreneurs’ relief to shares acquired through the exercise of EMI share options. Legislation is to be introduced to extend the relief to EMI shares by removing the 5% minimum shareholding requirement and allowing the 12-month minimum holding requirements to start on the date the option is granted.
• Capital gains tax exemption for employee shareholder shares: Exemption on all gains made on disposals of up to £50,000 worth of employee shareholder shares from capital gains tax. This will commence on 6 April 2013.
• Simplification of approved share schemes: Legislation will be introduced to give effect to the proposals in the Office of Tax Simplification’s (OTS) consultation report, published in June 2012, to simplify tax-advantaged employee share schemes, which include share incentive plans (Sips), sharesave schemes, company share option plans (Csops) and enterprise management incentives.