Taxation on share option schemes is expected to be reduced to 20 per cent in the forthcoming Finance Bill.

The Bill which will be published on February 15th is likely to provide for taxation on share option schemes at the same rate as capital gains tax. At the moment such schemes are taxed as income. The employers' organisation, IBEC, and the Irish Congress of Trade Unions, have lobbied for the change which will make share options a far more attractive way of remunerating employees for many companies.

However, the change will not offer a carte blanche to directors to reward themselves rather than their employees. To qualify it is likely that the scheme will have to be available to all employees and not just senior management. There will also be a period of around two years for which the employee will have to hold the options before cashing in.

The Minister for Finance, Mr McCreevy, brought the Bill to Cabinet yesterday before leaving for a speaking engagement in Florida. However, it will not be targeting childcare which the Minister believes was effectively dealt with through the large increases in child benefit announced at the time of the Budget.

IBEC has also been lobbying hard for changes to the rate of employer's PRSI since the threshold was abolished at the time of the Budget. This will be dealt with in the Social Welfare Bill, if at all.

Other areas which are likely to see change include teleworking through the abolition of the benefit in kind liability where an employer provides facilities for an employee to work from home.

The Bill will also give legislative effect to the broad range of taxation measures announced in the Budget and to a number of other areas.

It will increase the stamp duty exemption threshold to £200,000 for all loans executed after January 26th. It will also extend the deadline for the pre-June 15th rates of stamp duty to July 31st 2001.

Other measures include the detail of the capital write off which taxi drivers will be able to avail of.

The write-off period will be extended to five years while the commencement date for the period to be backdated from will be three years to November 21st 1997. The write-off will be allowed against both the trading and rental income of the driver.

Tax reliefs for third-level education fees will be extended to repeat years, those already holding a third-level qualification and to medicine, dentistry and veterinary which are currently excluded. Relief will also be extended for college fees paid in the US.

Tax incentives will be provided for offering residential accommodation above shops in Dublin, Cork, Limerick Waterford and Galway. There will be an extension of section 23 incentives for providing accommodation for groups with priority housing needs.