The Government launched a consultation aimed at introducing a new employment status in which employee owners will not have all the employment rights of a normal employee but will have shares in the company they work for. Any gains on those shares will be exempt from Capital Gains Tax.

The intention of the proposals is to create a new employment status “employee owner” to give businesses greater choice about the contracts they can offer to individuals, whilst ensuring appropriate levels of protection are maintained.

Under this new status, employee owners will receive shares between £2,000 and £50,000 which will be exempt from capital gains tax. Employee owners will have the same rights as current employees excluding unfair dismissal (except where this is automatically unfair or relates to anti-discrimination law), certain rights to request flexible working and training, and statutory redundancy pay. Individuals will also need to give longer notice to return from maternity leave or adoption leave.