EMI—trading activities
EMI—trading activities

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

  • EMI—trading activities
  • The trading activities test—single company
  • The trading activities test—parent company
  • Meaning of a substantial part
  • Permanent establishment
  • Research and development
  • Excluded activities
  • Excluded activities—wholesale and retail distribution
  • Excluded activities—leasing of certain ships
  • Excluded activities—property development
  • 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 have 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 enterprise management incentives (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 analyses the legislative detail of the trading activities test that companies must satisfy in order to grant EMI options. The Practice Note explains what is meant by a qualifying trade and it highlights relevant HMRC guidance and practical issues relating to it. For details of the EMI qualifying tests relating to a company’s independence, qualifying subsidiaries, gross assets and number of employees, see Practice Note: EMIs—qualifying companies.

For a flowchart determining a company's eligibility to grant EMI options, see: EMI

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