CG56715 - Employee shareholder shares: CG-exemption

TCGA92/S236B

The CG-exemption was repealed by FA 2017 in relation to shares acquired on or after 1 December 2016. The guidance is therefore only applicable where the shares were acquired before that date.

Subject to conditions, a gain accruing on a disposal by an employee shareholder of an employee shareholder share is not a chargeable gain and a loss is not an allowable loss (see CG15800):

• CG-exemption applies only to the first £50,000 worth of employee shareholder shares acquired by the employee in consideration of an employee shareholder agreement. See CG56720.
• CG-exemption does not apply to an employee shareholder share if the employee or an individual connected with the employee has a material interest in either the employer company or a parent undertaking. See CG56735.

An employee shareholder share that satisfies the conditions for exemption is referred to as an ‘exempt employee shareholder share’.