Advisers have criticised the Government for pushing ahead with its ‘shares for employment rights’ proposals.
In its Autumn Statement last week, the Government said it will push ahead with controversial plans to allow workers to give up their employment rights in exchange for company shares.
Under the proposals, unveiled at the Conservative party conference in September and due to be implemented in April next year, between £2,000 and £50,000 of shares will be given to employees in return for waiving some of their rights.
The shares will not be subject to capital gains tax.
The Autumn Statement says: “The Government is legislating to introduce a new employee shareholder status that will give staff a stake in their firms’ future success and give firms greater choice about the contracts they can offer to individuals.
“Employee shareholders will have different employee rights and shares worth a minimum of £2,000 in the firm they work for.
“As announced, the Government will exempt gains on up to £50,000 of shares acquired by employee shareholders from capital gains tax from 6 April 2013.”
Forty Two Wealth Management partner Alan Dick says: “A large part of the business community had already told the Government that this was a bad idea. I do not see why any employees would waive their rights to take shares that actually have no real value to them.”
Bloomsbury Financial Planning partner Jason Butler says: “This feels like a gimmick to me and I do not see why an employee would give up any rights in order to take shares which might not actually have any value. I do not see a high take-up of this.”