Budget 2010 - Employee Share Scheme Announcements

The Budget contained four announcements relevant for employee share plans – the most important is on the use of capital gains schemes:

Use of capital gains schemes

Over the last few years, many clients have used schemes where for a nominal or small initial outlay, an employee was able to receive future growth in share values which was taxed as capital rather than income (and also avoided National Insurance contributions). These schemes have taken many forms:

• joint share ownership interests (where a trust and employee jointly own a share and the trust has the value to date, with the employee receiving the future growth)
• growth shares – where a class of shares holds the right to receive all or some of the future growth in value of a company