EMI valuations for EMI schemes
EMI valuations for EMI schemes

The following Share Incentives guidance 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?
  • EMI valuation process for a public company
  • EMI valuation process for a private company

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 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.

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