Employment-Related Securities

Against a background of shares having been used by employers to reduce income tax (and NICs) on earnings, a special set of income tax charges now apply to shares acquired in connection with employment. The ability to argue that the employee acquires his shares purely in the capacity of investor has been severely curtailed. The effect is that the higher income tax rates may apply instead of capital gains tax when the shares are sold.

Securities

Because the rules catch not just shares but also other forms of "paper" issued by companies (e.g. debentures, bonds, warrants), the legislation uses the term "employment-related securities" (ERS).

Employment-related

Not only is "securities" widely defined but so are the circumstances in which they are regarded as "employment-related". First, a...