Impact of the Autumn Statement announcement on Employee Shareholder shares

25 November 2016

Within hours of the Chancellor of the Exchequer taking his seat after delivering his first Autumn Statement report, updated guidance on the Income Tax treatment of Employee Shareholder shares has been published by HMRC.

The reason for the unusual haste, for those familiar with such schemes, will have been apparent.

The tax benefits of Employer Shareholder Status (ESS) are to take effect from 1 December 2016 and so for anyone with outstanding agreements at the time of the announcement, only a small window of opportunity then remained for agreements to be finalised due to the requirement that 7 days must pass between an employee receiving relevant independent advice on the offer and the arrangement being finalised.

Employer Guidance has been updated to reflect the changes.

The government will legislate to close the status itself to new entrants at the next legislative opportunity.