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ARTICLE · 12 APRIL 2013

Entrepreneurs' Relief Extension For EMI Options

Charles Russell Speechlys LLP
Charles Russell Speechlys LLP
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Charles Russell Speechlys LLP

Charles Russell Speechlys LLP

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For companies which are not listed on the main market and which have a physical presence in the UK, EMI options remain the most tax efficient way of incentivising employees.

United KingdomTax
Martin Griffiths
Martin Griffiths

For companies which are not listed on the main market and which have a physical presence in the UK, EMI options remain the most tax efficient way of incentivising employees. EMI options have always guaranteed broad tax benefits, in securing a capital gains tax treatment at 28%, provided various conditions are met. From 6 April 2013, the benefit of entrepreneurs' relief, reducing the capital gains tax rate to 10% can apply to shares acquired pursuant to EMI options even if the option holder does not hold 5% of their employer and sells their shares after less than 12 months.

Qualification for EMI Schemes

Enterprise Management Incentive ("EMI") schemes are a popular means of incentivising employees in the UK through the provision of an option to acquire shares at a future date for a fixed price. Only certain classes of companies qualify to grant EMI options and the most pertinent qualifying conditions include:

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