Enterprise Management Incentive (EMI) schemes are an example of a tax-efficient share scheme. Qualifying employees of a company can be granted share options potentially without giving rise to income tax charges on the shares (which may otherwise happen with certain employment benefits in kind).
An application can be made to HM Revenue and Customs to agree on the market value of the EMI shares; potentially applying a minority shareholding discount in the process. This valuation will underpin the tax treatment applicable to the shares on exercise of the EMI option.
As of 1st April 2019, EMI share valuations are now valid for a period of 90 days from the date of the agreed valuation (i.e. a 90-day period during which the EMI option can be granted using the agreed valuation). This period used to be 60 days with the possibility of applying for a 30-day extension.
Further reading: Motivating and Incentivising Key Employees – EMI Schemes
BHW can help you with EMI schemes. For further information, contact our Corporate and Commercial department on 0116 289 7000 or email info@bhwsolicitors.com.