EMI—notification of grant of options to HMRC

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

  • EMI—notification of grant of options to HMRC
  • The notification obligation
  • Reasonable excuse
  • Form of notification for options granted prior to 6 April 2014
  • Form of notification for options granted since 6 April 2014
  • Correction of a notice of grant
  • Working time declaration
  • HMRC right of enquiry
  • Completion of an enquiry
  • Effect of enquiry
  • More...

EMI—notification of grant of options to HMRC

EMI Review: In the Spring Budget 2020, the government announced that it will review the enterprise management incentives (EMI) scheme (see News Analysis: Spring Budget 2020—Tax analysis). On 3 March 2021, the government published a call for evidence regarding a possible expansion of EMI schemes. This seeks views on the current EMI scheme to assess the effectiveness of its targeting and whether more companies should be able to access the scheme to recruit and retain the key talent they may need to grow and scale up. For further information, see Enterprise Management Incentives: call for evidence.

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 since 6 April 2014

  4. correction of a notice of grant

  5. working time requirement

  6. HMRC right of inquiry

  7. annual returns

The notification obligation

For a share option (including a replacement option) to be an EMI qualifying option, notice of the option must

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