Where an employee or director receives shares in the company in which he works at less than market value he has to pay income tax on the discount. There is an exemption from the tax charge where shares are acquired for family reasons.
However, HMRC has changed its guidance on the exemption. Originally it was accepted that the exemption could apply to shares issued by a company controlled by an individual or family where they procured the issue of shares.
This concession has disappeared from the updated guidance. Now, say, if a parent wishes to give shares to a child as part of succession planning, he has to do this by way of gift. If the shares are issued by the company they are not within the exemption.