EU give go-ahead for Enterprise Management Incentive (EMI) tax breaks
Post Author:
Angie Harvey
Date Posted:
May 21, 2018
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It was widely reported that state aid approval of Enterprise Management Incentive (“EMI”) options expired on 6 April 2018, which left a number of UK businesses in limbo. As a result of this HMRC advised companies to consider delaying the grant of EMI options until fresh state aid approval had been granted by the EU.
On 15 May 2018 the EU confirmed their approval for EMI and the generous tax breaks relating to the EMI scheme are once again assured. However, state aid approval for EMI schemes operating in the UK is only expected to continue until the UK leaves the EU, or until the end of any agreed Brexit transition period.
The EMI share option scheme introduced in 2000 is the most tax efficient scheme to attract and retain key staff, providing employees in receipt of qualifying options with significant tax advantages.
Depending upon the price paid by the employee for their shares on exercise of EMI options, the receipt and subsequent sale of the shares is subject to capital gains tax at just 10% instead of PAYE and NIC.
