Talking of companies coming to the stock market a new measure introduced in the Finance Act should be of interest to directors and employees who have either recently purchased newly issued shares or are planning to become investors.

The Finance Act introduces tax relief for new shares purchased by employees. The relief provides a deduction up to an aggregate lifetime limit of £5,000 for employees who subscribe for new shares in qualifying companies. Most Irish-based companies which are quoted on the Irish market should qualify.

It also reduces the time scale within which these employees must hold onto their shares without incurring tax liabilities. Under previous employee shareholder arrangements, new shares had to be held for up to five years or else tax benefits would be clawed back on a sliding scale.

The Finance Act now reduces the holding period to avoid a clawback to three years, with effect from disposals on or after February 12th 1998.