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CGT changes in 'shares-for-rights'

Employees will be exempt from normal capital gains charges on selling shares under George Osborne's new plan.

The 'shares-for-rights' proposal which Osborne discussed at the Conservative Party Conference on Monday is designed to relax the burden on businesses and encourage growth through new employee incentives.

Under the scheme, employees can opt to take shares in the company as long as they forfeit certain rights such as unfair dismissal and redundancy. There would also be necessary extensions to maternity leave although existing employees would not have changes forced into their contracts.

If they agree they could be granted between £2,000-£5,000 worth of shares and if they decide to sell, they would be exempt from a normal capital gains charge to any profit made.

The Conferadation of British Industry (CBI) have hailed the move but warned that for businesses of a certain size, the idea would not be relevant. Others have focused on the deregulation of employment laws.

Details of the legislation will be under review until late October until changes begin to be introduced from next Spring, including what price to ascribe to the shares should an employee be dismissed or choose to leave.

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