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The capital gains tax exemption described in this article only applies to employee shareholder shares acquired under an employee shareholder agreement entered into before 1 December 2016 (or 2 December 2016 in cases where the employee receives professional advice in relation to the share offer on 23 November 2016 before 1.30pm)¹.

Employee shareholder shares can be acquired after this date but with no favourable tax treatment. However, the relinquishment of employee rights to acquire shares in consideration of entering into an employee shareholder agreement is not a disposal of an asset, regardless of the date of the agreement².

A gain on the disposal of an exempt employee shareholder share by the person who acquired it is not chargeable³. An employee shareholder share is a share which the employee acquires in consideration of an employee shareholder agreement (the relevant agreement)⁴. Shares do not cease to be employee shareholder shares by reason only of the employee ceasing to be employed by the company⁵. For further