Global Daily Tax News, UK Establishes Tax Rules For PISCES Exchange Trading, (Apr 1, 2025)
HM Revenue and Customs has released guidance on tax arrangements that will apply to transactions involving a new stock exchange platform, The Private Intermittent Securities and Capital Exchange System (PISCES).
Plans for PISCES were set out by the Financial Conduct Authority in December last year.
PISCES will be a new type of trading platform that will enable intermittent trading of private company shares that are not publicly listed, using market infrastructure.
PISCES will establish a new secondary market, intended to provide businesses and investors with greater flexibility to buy and sell only a portion of a company, before potentially considering an initial public offering. Under the current regime, PISCES may not be used for the issuance of new shares or for corporate buybacks. Trading will occur only during designated trading windows.
Companies will be able to restrict access to certain investors, to safeguard the confidentiality of sensitive company data.
The offering is also intended to boost the attractiveness of employee share schemes, enabling shareholders to divest of their accumulated shares more flexibly and at more regular intervals.
Trading on PISCES is likely to begin later in 2025.
HM Treasury ran a consultation on PISCES from March to April 2024 and published a summary of responses in November 2024.
A new technical note has been released by HM Revenue and Customs to provide clarity on tax implications, setting out, among other things, the tax consequences when employees acquire shares in the companies they work for.
Further, the technical note sets out:
how the readily convertible asset rules apply;
how PISCES trading windows interact with the tax advantaged share schemes, Enterprise Management Incentives (EMI), and Company Share Option Plan (CSOP);
when Capital Gains Tax is chargeable; and
share valuation rules.
Further, HMRC has released draft regulations, the draft Private Intermittent Securities and Capital Exchange System (Exemption from Stamp Duties) Regulations 2025, to establish a Stamp Duty and Stamp Duty Reserve Tax exemption for PISCES share transactions.