TaxPersonal Tax‘Pleasant surprise for employees’ in finance bill

'Pleasant surprise for employees' in finance bill

Employee shareholders should be 'pleasantly surprised' by new rules in the finance bill, allowing them to claim double tax relief on shares they acquire, says PricewaterhouseCoopers.

Link: Finance bill tackles evasion and avoidance

Published today, the bill allows employees the relief on contributing shares acquired through a save as you earn (SAYE) option plan or share incentive plan (SIP) into a registered pension scheme.

Carol Dempsey, reward and compensation partner, PricewaterhouseCoopers commented:

‘Employee shareholders will be able to claim income tax relief for the value of shares contributed into a registered pension scheme from 6 April 2006, if acquired through SAYE or SIP. This could provide double tax relief for many employee shareholders.

‘Further relief will be available for those employees who contribute shares to a registered pension scheme, gaining tax advantages in the same way as any other plan contribution.’

Such reliefs would heighten the appeal of SAYE and SIPs as wealth creation vehicles, Dempsey added.

To obtain relief an employee shareholder must contribute shares into their registered pension scheme within 90 days of the SAYE option exercise or instruct the SIP trustees to transfer the shares.

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