This controversial initiative is to apply to shares received through the adoption of this new status of employee shareholder – probably from 1 September 2013 but there is always the chance of a delay due to criticisms from the House of Lords and the unions.
Employees will exchange some of their existing employment rights for the right to own shares in the business which can be gifted to them to the value of between £2,000 and £50,000. Any gains are tax free but on receiving the shares the employee pays income tax on the excess value over £2,000
The employer must provide legal advice and a 7 day cooling off period before an employee is able to relinquish the employment rights and clearly, great care is needed to join this voluntary scheme.
It is aimed at SMEs and should have a role to play for many companies. At the very least it needs to be considered by reference to your own circumstances.