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Treasury moots employee shareholding vehicle

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HM Treasury is consulting until 10 October 2014 on the introduction of an employee shareholding vehicle for share schemes, following the Office of Tax Simplification (OTS) recommendation in its review of unapproved employee share schemes. This discussion paper seeks views on:

  • the level of demand for such a vehicle should it be introduced;
  • the relative need and demand for the exemptions recommended by the OTS;
  • the effectiveness of the safeguards for the Exchequer recommended by the OTS; and
  • whether further safeguards might be necessary to protect against tax avoidance.

Additionally, HMRC is consulting until 10 October 2014 on the Office of Tax Simplification (OTS) recommendation to introduce the concept of the ‘marketable security’ into the tax rules for employment-related securities, allowing individuals more scope to choose when the tax charge arises. This would change the basis of taxation for employee shares, so that, broadly, individuals can choose whether the tax charge on these securities arises at the time they are acquired or, if different, at the time at which they can be sold for cash (when they become ‘marketable’). Other features of this OTS proposal include changes to the rules on ‘readily convertible assets’ and to the taxation of dividend and similar income from employment-related securities in certain circumstances.