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08/04/2004

Tax relief surprise for some employee shareholders

The Finance Bill was a "pleasant surprise" for employee shareholders, accountancy firm PricewaterhouseCoopers has said.

Under new rules many employees will be able to claim double tax relief for contributing shares acquired through a save as you earn (SAYE) option plan or share incentive plan (SIP) into a registered pension scheme.

Carol Dempsey, reward and compensation partner, PricewaterhouseCoopers said: "Employee shareholders will be able to claim income tax relief for the value of shares contributed into a registered pension scheme from 6 April 2006, if acquired through SAYE or SIP. This could provide double tax relief for many employee shareholders.

“Further relief will be available for those employees who contribute shares to a registered pension scheme, gaining tax advantages in the same way as any other plan contribution.”

The measures in the Finance Bill announced in Gordon Brown's Budget Speech last month were mainly aimed at stamping out tax evasion and included a number of changes to reduce tax abuse, but also included the enhancement of certain taxation reliefs.

Ms Dempsey added: “The generous reliefs will undoubtedly heighten the appeal of SAYE and SIPs as wealth creation vehicles.”

According to PwC, to obtain relief an employee shareholder must contribute shares into their registered pension scheme within 90 days of the SAYE option exercise or instructing the SIP trustees to transfer the shares.

(SP)

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