Capital Gains Manual

CG56320 - Shares and securities: employee share schemes: employment-related securities: introduction

This part of the manual gives detailed technical guidance on employee share schemes. 

You can also find further guidance in: 

• the Employee Tax Advantaged Share Scheme User Manual 

• the Employment Related Securities Manual 

If you are looking for a simple introduction to the main rules for employee share schemes, see Tax and Employee Share Schemes (GOV.UK). 

A common feature of employee share schemes is that employees may be offered shares, share options, or possibly other securities by reason of their employment. Part 7 of the Income Tax (Earnings and Pensions) Act 2003contains special Income Tax rules about cases where securities or securities options are acquired in connection with an employment and the definition of "securities" for the purposes of the employment related securities legislation includes a wide range of intangible assets in addition to shares.  

Some schemes are set up to comply with particular statutory requirements in order to secure beneficial tax treatment. These schemes (Enterprise Management Incentives (EMIs), Company Share Option Plans (CSOPs), Share Incentive Plans (SIPs) and Save as you Earn (SAYE)) are self certified schemes and are often referred to as Tax advantaged or approved schemes. 

The operation of the Taxation of Chargeable Gains Act 1992 is modified to take into account the Income Tax treatment of employment-related securities. Guidance on employment-related securities and unapproved schemes generally is at CG56320P. Guidance on approved schemes and the Enterprise Management Incentives is at CG56400P. Apart from points covered there, the normal capital gains rules apply.