There are no specific rules for the taxation of UK citizens on their income and gains from shareholdings in non-UK companies listed in a country within Europe, as opposed to non-UK companies listed in a country not within Europe. Such income and gains will typically be taxable in the UK, subject to any relevant Double Taxation Agreements.

At the time of Royal Mail Initial Public Offering (IPO) in October 2013, approximately 16% of the company was sold to 690,000 individual investors through a retail offer. A further 10% of the company was awarded to the company’s eligible UK employees with approximately 147,000 employees receiving shares.

Since the IPO, shareholders who purchased shares through the retail offer have been free to trade their shares. The Government does not hold records of these share dealings. Royal Mail has responsibility for maintaining a register of shareholdings in company.

The shares awarded to employees have been held in trust by Royal Mail’s Share Incentive Plan (SIP) to enable the employees to benefit from tax and national insurance advantages. Employees will be able to sell shares from October 2016. Eligible UK employees were also awarded a further 1% of the company’s shares in October 2015 and a further 1% award will be made later this year. These shares will also be held in the Royal Mail SIP for 3 years before they can be sold.

Large investment funds effectively comprise the investments of individuals, whether via their pension funds, insurance contracts, or other savings and investment products. The decision to invest in companies’ shares directly, or indirectly through a fund, is a matter for individual investors.

The Government has taken a variety of steps to encourage individual saving, and retail investment in shares in particular. For example, we have:

- Reduced the starting rate of income tax for savings;

- Increased the maximum annual amount which can be invested in an Individual Savings Account (ISA) to £15,240 in the 2015-16 tax year, and provided savers with greater flexibility to withdraw their money and put it back in to an ISA within the same year, without losing their tax benefits;

- Introduced, from April 2016, a new tax-free Personal Savings Allowance of £1,000 (or £500 for higher rate taxpayers) of interest earned on savings (taking 95 per cent of taxpayers out of savings tax altogether) as well as a new £5,000 tax-free dividend allowance for all taxpayers;

- Allowed shares from growth markets such as the Alternative Investment Market (AIM) to be held in ISAs - making investment in the growth markets easier;

- Abolished stamp duty on AIM shares, attracting further investment into growing companies and reducing the cost of raising capital for those companies.