HC Deb 12 November 1991 vol 198 c507W
Mr. Burns

To ask the Chancellor of the Exchequer whether he has any proposals to modify the restrictive rules in section 80 of the Finance Act 1988 concerning the tax charge on special benefits for employees; and if he will make a statement.

Mr. Maude

Where employees or directors acquire shares as a result of their employment, and because of their ownership of those shares they subsequently receive a "special benefit", that "special benefit" is currently taxable in some circumstances. For example, such "special benefit" might flow from an entitlement to subscribe to a "rights" issue, or from a right to shareholder priority in a public offer. The Government do not think it is right to charge tax on a benefit that is available to all or substantially all shareholders, where a majority of the shares in relation to which the benefit is actually received are held otherwise than by people who acquired them as employees. We therefore propose that exemption from the charge should apply to any benefit received in these circumstances on or after today. Legislation to this effect, which will include some minor consequential changes, will be introduced in the Finance Bill 1992.