The legislation sets few formal requirements on EMI schemes, the three requirements being that: 'options must be granted for commercial reasons in order to recruit or retain an employee in a company and not part of a scheme or arrangement the main purpose (or one of the main purposes) of which is the avoidance of tax.' (para. Ashfords practical tips on share option schemes: Part 4 - EMI schemes All values should be entered in pounds sterling and pence and entered to four decimal places. Declare as income in their next annual tax return any difference between the exercise price paid and the tax value agreed with HMRC on award (AMV), if below. By clicking below to subscribe, you acknowledge that your information will be transferred to Mailchimp for processing. For information about our privacy practices, please visit our website. In addition, the platform informs both the company and the shareholder about the likely tax implications for them. Existing user? To keep everything fair in the event that circumstances change. If a disqualifying event occurs, employees have 90 days from the time of the event to exercise any options they have obtained as part of the EMI scheme. Cashless exercise arrangements for EMI options are acceptable to HMRC provided they are allowed under the scheme rules. For example a shareholder holding 4.99% of the ordinary shares and voting rights will not qualify for entrepreneurs' relief if he acquired them from an old EMI option exercised before 6 April 2013. Such a change would not affect when the option may be exercised, meaning that, so long as such an exercise of the discretion was made in good faith for the purpose of ensuring the fair and/or effective operation of the option in accordance with the principle from the Burton Group case, it would be permissible. Thinking about EMI options? Here's what you need to know - Stephenson If you change the structure or formatting of your attachment it will be rejected. Use this worksheet to tell HMRC about options released, lapsed or cancelled in the tax year. It is common for EMI options to be drafted so that they are only exercisable on the occurrence of an exit event.

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