What is the Employee Shareholder Status?

The Finance Act 2013 states that where shares are acquired through the adoption of the “employee-shareholder” status on or after 1st September 2013, the shares attract relief from Income Tax, National Insurance (NI) and Capital Gains Tax (CGT). This is subject to the following:

Income Tax and National Insurance

The first £2,000 of share value will be exempt from Income Tax and National Insurance,

Capital Gains Tax

Any disposals of up to £50,000 of shares will be exempt from Capital Gains Tax.

There is a lifetime limit of £100,000 for exempt gains on disposals of shares issued in respect of agreements made after 16th March 2016.

Special rules effect share transfers between spouses and civil partners (see Finance Act 2016).


As announced in the Autumn Statement 2016, the above tax breaks will not apply for any employee-shareholder agreement made on or after 1st December 2016.

No new employee shareholder status (ESS) schemes have been permitted from 1st December 2016.

The tax advantages for employees with ESS at that date will continue.

For more information, we provide a Business Consultation to ensure our clients benefits from tax planning and accounting matters.

For any assistance contact Companies999, we will be happy to help you!

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