Details of the scheme, introduced by the Enterprise and Regulatory Reform Act 2013, are explained in this factsheet
An employee shareholder works under an employee shareholder employment contract – a new employment status that exists alongside employees, workers and self-employed persons.
The company may use the offer of a stake in the company as an incentive to attract a high-calibre employee who will then have a commitment to the business.
The hope is that employees will be attracted by the ownership of an asset which may well increase in value and which carries reduced capital gains tax liability, and be interested in the idea of owning some part of the business.
To download the factsheet, visit the 'Related documents' section on this page.