Glossary · UK
What is Employee Shareholder Status?
A now-abolished employment status where employees exchanged certain employment rights for shares; removed from 2016.
Full Definition
Employee Shareholder Status was introduced in September 2013 under section 205A of the Employment Rights Act 1996, allowing employees to give up certain employment rights (including unfair dismissal rights and the statutory right to request flexible working) in exchange for at least £2,000 worth of shares in their employer company. The first £2,000 of shares received were exempt from income tax and NI, and gains on disposal of up to £100,000 of shares were exempt from CGT. The status was abolished for new arrangements entered into from 1 December 2016 following concerns that it was being used primarily as a tax avoidance vehicle by high earners, with little genuine exchange of rights taking place. Existing arrangements entered into before that date may still have CGT protections in place.