TaxPersonal TaxTreasury to amend share scheme plans

Treasury to amend share scheme plans

Treasury ministers have agreed to amend share ownership plans following debates on the Finance Bill - just days before the legislative process is cut short by the announcement of an election.

Financial secretary Stephen Timms accepted a Tory amendment enabling overseas employees to participate in share ownerhip schemes.

Timms said the government accepted the move would provide ‘a useful facility for employers who have employees on long-term secondment abroad’.

But, he also added a government amendment allowing deductions to be made from salaries for partnership share money.

The government is in the process of rushing the remaining stages of the Bill through parliament ahead of today’s expected announcement by prime minister Tony Blair on a date for the general election.

Before Blair postponed the 3 May date, the intention had been to split up the Finance Bill, passing only essential clauses required for the Budget before dissolution and bringing in a second bill when returning later.

Later in the debate, economic secretary Melanie Johnson rejected Tory calls for an amendment to rectify what Conservative spokesman Howard Flight described as a defect in Enterprise Management Incentives rules, ‘noted’ by the ICAEW.

The rule Flight referred to prevents a company, which has used up its full EMI capacity, from rolling over all its options into acquiring another company in a takeover.

Flight said existing rules meant it will only be possible to exchange a new EMI option for an old one only if the total did not exceed Pounds 3m.

Johnson responded by saying that changing the rules would allow one company or group to exceed the ‘generous Pounds 3m limit’ as a result of merging with several companies with EMI options, while the government’s intention was in fact to limit additional incentives to smaller, riskier companies.

Flight welcomed the introduction of EMI share scheme concession for overseas staff. He claimed the current EMI rules lead some companies to exclude overseas employees from share schemes, while others incurred the additional expense of setting up special schemes for their overseas staff.

But his call for the concession to be backdated to last year so staff, who had lost out could catch, up was rejected.

Links

Plans to expand EMI welcomed

Finance Bill rushed through Commons

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