Exclusive: Government adds employee tax break to Pisces
The government has introduced legislation for the new ‘Pisces’ market designed to allow trading for private companies, extending share tax breaks for employees to the platform, City AM can reveal.
Pisces—the Private Intermittent Securities and Capital Exchange System—was devised by the previous government as part of an effort to revive UK capital markets.
The platform has been designed to allow private firms to trade shares at intervals similar to the public markets, acting as a “stepping stone” for firms mulling a public float and offering investors an opportunity to sell off their stakes in unlisted companies.
Chancellor Rachel Reeves had committed to launch Pisces by May, with share trading set to begin taking place by the end of this year.
Tax breaks for Pisces
The new legislation will ensure employees with share options will be able to exercise them on Pisces and retain tax advantages, with the existing Enterprise Management Incentives and Company Share Option Plan contracts extended to include the platform.
In last year’s Autumn Budget, Reeves also announced that Pisces transactions would be exempt from stamp duty taxes on share trading.
“Getting Pisces up and running will support UK growth companies,” City minister Emma Reynolds said.
“This will boost our capital markets and help to grow our economy, putting more money in working people’s pockets as part of our Plan for Change.”
However, City figures have raised doubts over whether Pisces will be the best way to increase capital flows to London’s equity markets.
Companies will not be able to use the platform to raise new money, as only secondary trading will occur, which may lead many to avoid using the platform.
Concerns have also been raised over the weak legal protections and disclosure requirements proposed for the platform.
While Pisces will be built for institutional and professional investors, only £250,000 in net assets (excluding a primary residence) is required to qualify as a high net worth individual, leaving risk uninformed investors will be taken advantage of.