Gordon Brown stated that the 1.7million employees currently enjoying participation in Save As You Earn (SAYE) share schemes will continue to benefit from this scheme. However, no new Approved Profit Sharing Schemes will be approved after 5 April 2000 and no further tax free awards will be allowed under Approved Profit Sharing Schemes after 5 April 2002.
Sandy Pepper, a partner at PricewaterhouseCoopers said: ‘We welcome the decision to keep both SAYE and CSOP as the new All Employee Share Ownership Plan, which we anticipate being very successful, is as yet untried in practice and will require a period to become established.
Gordon Brown also announced changes to tapering relief on gains on disposals of business assets which means that the tax rate will be only 10% if the assets are held for more than four years. Changes in the definition of ?business asset? mean that all employee share holders will be able to benefit from this 10% capital gains tax rate.
‘Whilst we welcome this change, we should not forget that, in practice, the annual exemption ensures that the majority of employee shareholders with smaller holdings will not pay capital gains tax on the sale of shares in their employing companies in any case,’ added Pepper.
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