Posted: 07 February 2008
Issue: Online only
Categories: Update, News, CGT

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Employee shareholders will have to pay an extra 13% tax, says trade body

About 80,000 employees may be negatively affected every year by recently announced changes to capital gains tax, a trade organisation has warned.

The not-for-profit ifs ProShare, which promotes employee share ownership, responded to a speech by Alistair Darling.

Mr Darling told guests at the EEF Manufacturers' biennial dinner that 'around 80,000 business owners and investors will gain from the entrepreneurs' relief next year alone'.

ifs ProShare said an identical number of 'ordinary employees' per annum are likely to suffer as a result of entrepreneurs' relief. 

Basic rate taxpayers who have held shares in their employer for at least two years are currently subject to a 5% CGT charge. But the Chancellor's changes mean that from April, the same people will have to pay an additional 13% tax on any gain above £9,200.

Phil Hall, head of public Affairs at ifs ProShare, said: '[We don't] begrudge the last-minute concessions granted to entrepreneurs.

'All that we ask is that the hard-working employees who invest in their employer via an all-employee share plan… receive the same treatment when it comes to taxing the rewards of their success.'

 

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