The 2012 Budget and Employee Share Ownership

Chancellor of the Exchequer announces proposals in Budget impacting employee share schemes, employee ownership and personal investments in companies.
By: POSTLETHWAITE Law Firm
 
March 23, 2012 - PRLog -- Chancellor of the Exchequer announces proposals in Budget impacting employee share schemes, employee ownership and personal investments in companies.

The key proposals impacting share schemes and employee ownership are as follows:
•   The Chancellor has announced his intention to improve and reform Enterprise Management Incentive Options (EMI Options) by (a) providing additional support to start-up companies to assist them in being able to operate EMI option schemes, (b) consulting on extending EMI options to academics who are employed by qualifying start-up companies, (c) extending entrepreneurs’ relief to shares acquired on the exercise of EMI options and (d) increasing the individual EMI option grant limit significantly from £120,000 to £250,000, subject to State aid approval. It is not yet clear how (a), (b) and (c) will work.

•   The Government will conduct an internal review to examine the role of employee ownership in supporting growth and to consider ways in which barriers, including tax barriers, to its wider take-up could be removed. The review will also consider the findings of the work on employee ownership being led by the Minister for Employment Relations, Consumer and Postal Affairs, due to report in summer 2012, and will conclude ahead of Autumn Statement 2012.

•   The Government will consider the recommendations of the Office of Tax Simplification’s review of tax-advantaged employee share schemes, and will consult on how to take these proposals forward in Finance Bill 2013.

•   From April 2012, the EIS annual investment limit for individuals will be increased to £1 million. The qualifying company limits will be increased to companies with fewer than 250 employees, and the annual investment limit for qualifying companies will increase to £5 million under both EIS and VCTs, subject to State aid approval.

•   From April 2012, the Government will introduce the new Seed Enterprise Investment Scheme (SEIS), providing income tax relief of 50 per cent for individuals who invest in shares in qualifying seed companies. The Government will also offer a capital gains tax (CGT) exemption where gains realised on the disposal of assets in 2012–13 are invested through SEIS in the same year.



News release ends, 21 March 2012.

We are an independent firm of UK solicitors focusing principally on employee ownership, employee share schemes and employee-led mutuals (ELMs).  For more information, please visit http://www.postlethwaiteco.com/
End
Source:POSTLETHWAITE Law Firm
Email:***@postlethwaitheco.com
Tags:CO-OPERATIVES BILL, Employee Share Schemes, Share Scems, Employee Ownership Lawyers
Location:England
Subject:Reports
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