The Enterprise Management Incentive regime was originally introduced to promote share ownership in small to medium sized trading companies. To make them attractive to both the employer and employee, they confer very generous tax reliefs; there is never a charge to tax on the grant of an EMI option, there is a corporation tax deduction for the company on exercise of the option and the employees would only be subject to capital gains tax at 10% on sale.
Such schemes are used by many companies because awarding EMI options to employees effectively aligns their interests with that of the shareholders. This additional incentive may also serve to grow the company more quickly. Furthermore, this collective interest is maintained once the employees exercise their options as they are then able to directly share in the profits of the company.
However, EMI options fall within the definition of state aid, for which the current EU approval only applies up to April 2018. As a result of the historic vote which has inevitably led to the triggering of Article 50, it is possible that this approval may not be extended beyond April 2018 and it is difficult to say whether or not any future government will re-introduce such a scheme post Brexit.
Therefore, if you wish to take advantage of this extremely tax efficient scheme, the time to act is now as it may not be available after April 2018.
For more information and to see if your company qualifies please contact either:
Glen Thomas email@example.com or
Jonathan Harvey firstname.lastname@example.org
At MHA MacIntyre Hudson or telephone our Kent office on 03330 100 220