Commentary

C3.1909 CGT reliefs and deferrals—employee shareholder status

Capital gains tax
Capital gains tax | Commentary

C3.1909 CGT reliefs and deferrals—employee shareholder status

Capital gains tax | Commentary

C3.1909 CGT reliefs and deferrals—employee shareholder status

The capital gains tax exemption described in this article only applies to employee shareholder shares acquired under an employee shareholder agreement entered into before 1 December 2016 (or 2 December 2016 in cases where the employee receives professional advice in relation to the share offer on 23 November 2016 before 1.30pm)1.

Employee shareholder shares can be acquired after this date but with no favourable tax treatment. However, the relinquishment of employee rights to acquire shares in consideration of entering into an employee shareholder agreement is not a disposal of an asset, regardless of the date of the agreement2.

A gain on the disposal of an exempt employee shareholder share by the person who acquired it is not chargeable3. An employee shareholder share is a share which the employee acquires in consideration of an employee shareholder agreement (the relevant agreement)4. Shares do not cease to be employee shareholder shares by reason only of the employee ceasing to be employed by the company5. For further details of employee shareholder agreements see E4.591.

Where the gain accrues on the disposal of exempt employee shareholder shares acquired under an employee shareholder agreement entered into after 16 March 2016 there is a lifetime limit of £100,000 on the exempt gains which can

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