EMI—notification of grant of options
EMI—notification of grant of options

The following Share Incentives guidance note provides comprehensive and up to date legal information covering:

  • EMI—notification of grant of options
  • The notification obligation
  • Form of notification for options granted prior to 6 April 2014
  • Form of notification for options granted on or after 6 April 2014
  • Correction of a notice of grant
  • Working time requirement
  • HMRC right of inquiry
  • Publishable information
  • Notifying errors in EMI options to HMRC
  • Annual returns

Enterprise management incentives (EMI) schemes are tax advantageous discretionary share option schemes used widely in the UK. EMI schemes have the potential to provide very generous tax treatment and allow for generous individual awards however, the EMI legislative requirements are strict and the notification obligation is imperative to ensuring that the EMI tax status is not lost.

This Practice Note details the following:

  1. the notification obligation

  2. the form of notification for options granted prior to 6 April 2014

  3. the form of notification for options granted on or after 6 April 2014

  4. correction of a notice of grant

  5. working time requirement

  6. HMRC right of inquiry

  7. publishable information, and

  8. annual returns

The notification obligation

For a share option to be an EMI qualifying option, notice of the option must be received by HMRC within 92 days of the date of grant of the option. HMRC enforces this time period strictly and failure to make such a notification will likely render the options unapproved and unable to benefit from the EMI-related tax reliefs.

A 'reasonable excuse' defence for non-compliance with time limits is permitted, provided that whatever needs to be done is done without unreasonable delay once the reasonable excuse has ceased. The Finance Act 2014 (FA 2014) gave further clarification as to the term 'reasonable excuse'. This guidance only applies for excuses on or

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