TaxPersonal TaxEmployee share schemes in CGT rate hike

Employee share schemes in CGT rate hike

1.7m face new flat rate set to be more than three times that currently paid by basic rate taxpayers

Proshare has
joined the growing ranks of organisations critical of tax changes announced in
this week’s Pre-Budget Report, expressing concern over the ‘unintended
consequences’ of capital gains tax changes.

The group, which promotes the benefits of employee share ownership, said the
1.7m employees making monthly savings through a Sharesave Save As You Earn
scheme could now face an 18% tax charge instead of a possible 5% rate.

‘While the Treasury may have sound reasons for simplifying CGT, it would
appear the consequences for employees saving through employee share plans had
not been fully assessed. These apparently unintended consequences contradict the
government’s stated commitment to encouraging long-term saving and to its
support for wider share-ownership,’ it said.

Under current rules, basic rate taxpayers who hold on to their shares for two
years benefit from a 5% rate on any CGT liability when they sell. Higher earners
currently pay 10%.

Related Articles

Inheritance tax is 'unfit for modern society' and should be abolished, says think tank

Personal Tax Inheritance tax is 'unfit for modern society' and should be abolished, says think tank

3w Alia Shoaib, Reporter
Rent-a-room relief – the survey says…

Personal Tax Rent-a-room relief – the survey says…

2m Helen Thornley, ATT Technical Officer
What should the OTS prioritise in its review of inheritance tax?

Personal Tax What should the OTS prioritise in its review of inheritance tax?

4m Alia Shoaib, Reporter
LITRG urges government to consider tax changes in disability work plan

Administration LITRG urges government to consider tax changes in disability work plan

5m Lucy Skoulding, Reporter
HMRC appeal rejected in Tottenham Hotspur case

Administration HMRC appeal rejected in Tottenham Hotspur case

6m Emma Smith, Managing Editor
HMRC urged to clarify impact of income allowances on Self-Assessments

Personal Tax HMRC urged to clarify impact of income allowances on Self-Assessments

7m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

7m Emma Rawson, ATT Technical Officer
Wealthy individuals could circumvent top tax rate rises

Personal Tax Wealthy individuals could circumvent top tax rate rises

9m Alia Shoaib, Reporter