Skip to: main navigation | main content | sitemap | accessibility page

 
 
 

Get the lowdown on the HMRC changes to EMI Option Schemes

An Enterprise Management Incentive (EMI) option is granted to an employee to acquire shares in the company for a set ‘exercise price’. HMRC has issued new guidance on EMI Option Agreements, governing the details it must contain if the shares within the scheme are in any way restricted.

Previously, it was considered acceptable for the EMI Option Agreement to include a section that stated that the shares were subject to any restrictions laid out in the document that specifies the regulations of the company’s operations.

Though, HMRC has now determined that this section is no longer applicable. They have issued guidance stating that for options granted after 17th August 2016, any information about restrictions that the shares are subject to must be set out within the EMI Option Agreement itself. If the EMI Option Agreement doesn’t do this, HMRC has said that it will take a closer look at the at the time when the option was granted, taking into account evidence that the restrictions had been brought to attention.

Restrictions that are typically applicable to shares granted under EMI Option Schemes include restrictions on transfer, pre-emption rights and drag-along provisions.

Clients granting future EMI options should therefore ensure that the EMI Option Agreement now contains details of any restrictions on the shares, and for any options that have been granted since 17th August 2016, we recommend employees are now notified in writing of any restrictions that attach to the shares covered by the grant.

Should you require further information on this or any other matter relating to EMI Share Option Schemes or other types of employee benefit schemes, please contact our Head of Employment and Corporate Support, Nick Jones on 0117 906 9254 or at nicholas.jones@gregglatchams.com

Article based on the 18 April 2017 update posted by Taylor Wessing.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.

Categories: Commercial | Corporate | Employment | For Business | Manufacturing & Supply Chain

Employee Shareholders

Employee Shareholders

The concept of employee shareholders was first introduced by the government in October 2012, with legislation in place by 1 September 2013. But what is an employee shareholder? Put simply, they are employees who are given a minimum of £2,000 of shares i...

Changes to national minimum wage

Changes to national minimum wage

On Saturday 1st October 2016, national minimum wage increased across the UK. It is crucial for employers to be making changes in accordance with this increase. In doing so, you’ll ensure you avoid a fine from HMRC or the possibility of tribunal from wor...

Navigation

Taxonomy Selection

 

To find out how we can help you or your business, get in touch.

 
 
 
  • This field is for validation purposes and should be left unchanged.