The 'Employee Shareholder' was a type of employment category that came with tax benefits. This ceased in 2016.

This is a freeview 'At a glance' guide to Employee Shareholder status. 

An employee shareholder falls somewhere between an employee and a worker in terms of employment rights. 

This special type of employee was given special tax reliefs: this did not last long and tax benefits to new employees were removed from 2016.

Introduced by the Growth and Infrastructure Act 2013, 'the employee shareholder' gives up certain employment rights in exchange for £2,000 of tax-free shares which are exempt from Capital Gains Tax (CGT) on disposal.

In his Autumn Statement 2016, the Chancellor announced the removal of tax reliefs for individuals entering into Employee Shareholder Status (ESS) agreements on or after 1 December 2016.

Under the rules for employee shareholders who entered into agreements before 1 December 2016

Employee Shareholder tax implications; at a glance

Income Tax and CGT reliefs are no longer available for individuals entering into ESS agreements on or after 1 December 2016.

Employment and company law implications (ongoing); at a glance

Useful guides on this topic

Employment-Related Securities & Share Schemes
What are the tax consequences when a company gives shares to an employee or director? What are employment-related securities? What is best: shares or share options? How do you set up a share scheme?

EMI: Enterprise Management Incentive Scheme
What is the Enterprise Management Incentive (EMI) scheme? What's the difference between EMI and an unapproved share scheme?


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