EMI valuations for EMI schemes
EMI valuations for EMI schemes

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

  • EMI valuations for EMI schemes
  • Restricted shares and EMI valuations
  • Why do you need to obtain an EMI valuation?
  • Necessity to determine the market value of shares on grant of an EMI option
  • Necessity to determine the market value of shares on exercise of an EMI option
  • Necessity to determine the market value of shares on an EMI option rollover
  • EMI valuation process for a public company
  • EMI valuation process for a private company
  • Form of valuation and dealing with HMRC
  • Timing of agreeing a valuation with SAV
  • More...

Coronavirus (COVID-19): On 8 June 2020 HMRC confirmed in its Employment Related Securities Bulletin 35 that any new EMI valuation agreement letter issued by HMRC on or after 1 March 2020 will be valid for 120 days. In addition, any EMI valuation agreement letters already issued, where the 90 days expires on or after 1 March 2020, can be automatically treated as being extended by a period of 30 days.

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.

Restricted shares and EMI valuations

Restricted shares are shares which are subject to any restrictions described in sections 423(2)–(4) of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003). See Practice Note: What are restricted securities?

There are two types of market values in respect of restricted shares which may be required for enterprise management incentives (EMI) purposes:

  1. actual

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