How could the new All-Employee Share Plan affect employees tax credits?
A. The basic WFTC/DPTC capital rules – There is a general rule that a family with capital of more than £8,000 (the upper limit in the case of WFTC) or £16,000 (the upper limit in the case of DPTC) – as at the date of their application – will not be eligible for tax credits. And families with capital over £3,000 lose £1 of tax credit per week, for every £250 band between £3,000 and the upper limit. The rule about the upper limit is a basic eligibility rule that has applied since WFTC was first introduced last year and which also applied to Family Credit from its inception in 1988. “Capital” excludes the family home and possessions, but has always included shares, savings and other investments. It does not matter whether the shares were originally acquired under a company’s new All-Employee Share Plan, an earlier tax-relieved approved employee share scheme, an unapproved share scheme or by any other method. The basic capital rule is explained in all the leaflets and literature on tax cre
