TaxPersonal TaxShare option tax breaks to be extended

Share option tax breaks to be extended

Chancellor Gordon Brown will next week announce improved tax breaks for employee share option schemes as part of his pre-Budget statement, according to reports in this morning's Financial Times.

Brown could abolish the limit on the on the number of staff eligible for tax privileged share options. Companies wishing to give their staff share options can currently grant 15 people options worth up to £100,000 that are not liable for national insurance contributions or income tax. Instead, capital gains tax is deducted, but could be as low as 10%.

The current incentives were introduced to help small companies recruit and retain the high-calibre employees. Business start-ups and dot.coms are often short of cash and need to use other means to attract skilled staff.

Other measures in next week’s report could include a tax credit to encourage business into poorer areas, an above inflation increase in pensions and the abolition of stamp duty on share dealing.

Links

Inland Revenue page on Enterprise Management Incentives

Pre-Budget statement autumn 2000

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