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Employee share ownership hit by CGT reform
Simplification of capital gains tax (CGT) by abolition of taper relief may hit Save As You Earn (SAYE) share schemes hard critics complain.
Present rules that afford employees rates of 5 and 10% for basic and higher rate tax payers will change with the abolition of taper relief from next April which will mean higher taxation at the rate of 18%.
Approximately 16%-80,000 employees-out of 1.7m employees who save through SAYE are likely to be worse off.
This detracts from the attraction of SAYE share schemes which have been taken up by 77% of FTSE 100 companies-used to promote staff loyalty, morale and productivity.
Most affected also conversely appear to be basic rate tax payers though there are ways of mitigating CGT charges.
At present many business groups are lobbying the Chancellor for a change in his original proposals so as to allow businesses to offer such share save incentives for employees in the future.
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