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Ireland's Finance Bill Will Reduce Tax On Share Option Work Schemes By 20%

Mandy Robinson, Tax-news.com, London

08 February 2001

Charlie McCreevy, Ireland's Minister for Finance, presented the long-awaited Finance Bill to the Cabinet on Tuesday, and it is widely supposed that the Bill contains a provision to reduce the tax on share option schemes by 20 per cent to bring it into line with the current rate of capital gains tax.

The Irish Business and Employers Confederation (IBEC), an organisation representing companies across Ireland, has called for a review of the tax for some time now, stating: 'Such schemes are important in assisting companies in promoting employee involvement, moderating wage claims and in staff retention. Existing profit-sharing legislation should be simplified in order to facilitate wider share ownership.'

According to a report in the Irish Times this week, the new rules will not allow directors to award themselves options while excluding employees; it is expected that senior and junior staff will have equal access to the scheme. There is also a two-year waiting period before option shares can be sold.

Other measures in the Bill are expected to include implementing legislation to support a wide range of taxation provisions announced in the last Budget.

The Bill will be published on February 15.

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