ESS interests provided to an employee's associates

The ESS rules treat ESS interests provided to an associate of your employee as if they were acquired by your employee, rather than their associate.

Depending on the type of scheme and individual circumstances, your employee will have to pay tax, either upfront or at the deferred taxing point. Once tax has been paid under the ESS rules and the interests move into the CGT system, any future capital gain or capital loss incurred on these interests is borne by the associate.

You must provide a statement to your employee, rather than to their associate, to fulfil your reporting requirements.