I have referred to the situation on approved share options schemes on a number of occasions recently in this House.
Last year I introduced an amended tax treatment of share options that provided for favourable tax treatment whereby, on disposal, the gain from shares acquired as a result of employee share options would be chargeable to capital gains tax only, providing certain conditions were satisfied. The main conditions were that the scheme should apply to all employees on similar terms.
This was done following extensive consultation with representative bodies and the relevant State agencies. It was considered that the scheme, as introduced, would meet its objective namely, to help companies recruit and reward highly skilled and internationally mobile staff as well as facilitating participation by all employees in the fortunes of the company they work for.
I listened to the calls for share options to be used as an incentive and introduced a key employee provision where options can be granted without similar terms conditions. In such a case no more than 30% of the total number of shares over which rights are granted in any year can be used for the key employee element.
The capital gains tax treatment of what was heretofore considered chargeable to income tax is a generous relief and is without limits. Therefore, it is reasonable that it should only apply in defined circumstances.
To date the total number of applications received and reviewed by the Revenue Commissioners is 71. Nine schemes have been approved and approximately 6,800 employees can benefit from these. There are two main elements that are creating difficulties for some schemes that are seeking approval from Revenue, namely the all employee and similar terms rules.