EMI—qualifying companies
EMI—qualifying companies

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

  • EMI—qualifying companies
  • Advance assurance
  • Independence test
  • The test
  • The subsidiary element of the test
  • The control element of the test
  • The arrangements element of the test
  • Employee-ownership exception
  • Corporate trustee
  • Qualifying subsidiaries test
  • More...

EMI Review: In the Spring Budget 2020, the government announced that it will review the EMI scheme to ensure that it provides support for high-growth companies to recruit and retain the best talent so they can scale up effectively, and to examine whether more companies should be able to access to the scheme. This suggests that the government may be considering less restrictive eligibility criteria for companies who wish to offer an EMI scheme, therefore potentially increasing the number of companies who qualify to operate EMI schemes. See News Analysis: Spring Budget 2020—Tax analysis.

The EMI regime is prescriptive and sets out numerous requirements that must be met at the time the options are granted, including in relation to:

  1. the company granting the options

  2. the employees being granted the options

  3. the shares being placed under option, and

  4. the options themselves

This Practice Note focuses on the conditions that must be met in relation to companies granting the EMI options. These conditions are described in the context of the income tax relief provided for in sections 527–541 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003).

For a flowchart to help illustrate whether a company qualifies to grant EMI options, see: EMI scheme—flowchart to determine company's eligibility. For a checklist to help establish whether a company and its employees qualify to grant/receive EMI options, see: EMI

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