Taxation of Chargeable Gains Act 1992 section 236B

Exemption for employee shareholder shares

Section 236B provides a capital gains tax exemption for gains on certain employee shareholder shares when they are disposed of by the original employee who acquired them.

• Gains on qualifying employee shareholder shares are exempt from capital gains tax when the shares are sold or otherwise disposed of by the employee who originally received them
• To qualify for exemption, the shares must be "exempt employee shareholder shares" — meaning they satisfy additional conditions set out in related provisions concerning a £50,000 limit and the absence of a material interest in the company
• Employee shareholder shares are shares received by an individual in return for entering into an employee shareholder agreement under which the individual accepts employee shareholder status, giving up certain employment rights in exchange for shares
• The exemption applies only to shares still held by the employee who originally acquired them — a person is treated as acquiring the shares at the point they become beneficially entitled to them

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