A NEW ALL-EMPLOYEE SHARE SCHEME

An outline of a new all-employee share ownership scheme to be
introduced next year was published today by the Inland Revenue as
part of the Government's drive to tackle the productivity gap and
promote enterprise for all.

The technical note asks for comments on the proposed new scheme. An
advisory group made up of tax practitioners, business people and
other experts will work with the Revenue to draw up the details of
the scheme.

DETAILS

1. The technical note issued today by the Inland Revenue is entitled,
"A New All-Employee Share Scheme". It sets out the proposed new
scheme which will for the first time allow employees to allocate part
of their pre-tax salary to buy shares in their employer's company
without paying income tax or NICs on those shares. If these shares
are held for three years, the employee will be subject to income tax
on the amount of salary allocated to those shares but any gains
arising while they are in the scheme will be free of income tax, NICs
and capital gains tax.

2. Comments on the new scheme are welcome and should be sent to the
Inland Revenue before 30 April 1999.

3. An advisory group of tax practitioners, business people with
experience of share schemes and other experts will work with the
Revenue to draw up the details of the scheme. Members of this group
will be recruited in accordance with Cabinet Office rules.

4. Copies of the note can be downloaded from the Inland Revenue's
website www.inlandrevenue.gov.uk or obtained by post from:

Inland Revenue
Capital & Savings Division
Room 110, Somerset House
Strand
London
WC2R 1LB

NOTES FOR EDITORS

1. This technical note forms part of the Government's commitment to
the enterprise economy by encouraging widespread employee share
ownership and long term holding of shares by employees. A
consultation document entitled "Consultation on Employee Share
Ownership" was issued by the Treasury in December and the new scheme
takes into account responses received to that document.

2. Further details on the consultation and the main features of the
new scheme can be found in the Treasury's Press Release entitled
"Promoting Enterprise For All : A New Employee Share Scheme" which is
also being issued today.

3. The Government intends that draft Clauses will be published as
part of the Pre-Budget Report and the new scheme will be introduced
in the 2000 Finance Bill.

INLAND REVENUE PRESS OFFICE
Media enquiries to: 0171 438 6692/6706/7327
(Out of hours: 0860 359544)

Non-media enquiries to: 0171 438 6420/6425 (Office hours only)

Inland Revenue information is on the Internet:
www.inlandrevenue.gov.uk

# = pounds sterling

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