Stewart Associates (Shrewsbury) Ltd
Emstrey House (North), Shrewsbury Business Park, Shrewsbury, Shropshire, SY2 6LG.

Telephone: 01743 235236   Email: enquiry@saltd.co.uk

20 February 2014

Employee Shareholder (ES) Status

The employee shareholder (ES) status became available on 1 September 2013. In return for sacrificing some employment rights, the chief benefit is that gains on ES shares are exempt from capital gains tax if those shares were less than £50,000 in value when first acquired by the employee. For individuals owning less than a 25% stake in a company (together with connected parties there is the potential to provide a tax-free exit on sale or winding up. Perhaps the owners should issue one share each for this purpose, and then on the next day, in consideration of the ES agreement, the company issues fully paid-up shares in the company with a value of £2,000. No consideration is given by the employee other than sacrificing their rights and the shares become a deduction for the company. This exempts 2000/2001ths of future gains, assuming that by the second day the only assets (and hence value) are the shares. There is nothing in the guidance which directly prohibits the application to a start-up company. It can apply to new recruits as well as existing employees although I do not believe the intention was ever to provide an exit strategy to business founders better than the 10% Entrepreneurs Relief. Indeed there is no trading requirement so it seems ES shares could save the 18%/28% capital gains tax for a shareholder of a non-trading company.

 

Contact Us

    01743 235236




    News Items

      16/7/2020

      SEISS second grant - guidance on eligibility

      For some detailed guidance on what may impact on eligibility for the second self-employed grant I wo...  Read more >>


      13/7/2020

      SEISS second grant - sicrluar email 13th July 2020

      This email is aimed at people working on a Self-employed basis. To clarify, that does not include p...  Read more >>


      10/7/2020

      SDLT and VAT circular email 9th July

      SDLT: while the zero rate up to £500,000 applies to main residential properties for second (or...  Read more >>


      1/7/2020

      Flexible Furlough Template Employee letter

      Note. Items in italics to be amended or omitted as appropriate to individual circumstances Employ...  Read more >>


      26/6/2020

      Flexible Furlough circular email 26th June 2020

      The Direction governing the amendments to the Furlough scheme has been published on 25th June. The ...  Read more >>


      All News Items

      © 2020 Stewart Associates (Shrewsbury) Ltd. All rights reserved.       Terms & Conditions | Privacy Policy | Site Map   Website created by Datacraft