The following Share Incentives Q&A provides comprehensive and up to date legal information covering:
Enterprise management incentives (EMI) share options can only be granted to employees of the relevant company or its qualifying subsidiaries paragraphs 26–27 of Part 4 of Schedule 5 to the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003).
If a share option was granted to a non-employee (such as a non-executive director (NED)) it will not qualify as a 'Schedule 5 EMI option' and will instead be treated as an unapproved share option and be taxed accordingly. For further details, see Practice Notes: Unapproved share options and Unapproved share options—tax treatment.
As regards the EMI qualifying status of the relevant option scheme and any other options granted under that EMI scheme, the grant of a share option to a NED should not impact on the qualifying status of the EMI scheme or the other EMI options unless there was something specific to this effect in the scheme rules—which would be highly unusual. In addition, it will not count towards the company EMI legislative limits contained in ITEPA 2003, Sch 5, Pt
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