EMI (Enterprise Management Incentives)

• EMI is an discretionary approved share scheme which has proved very popular with SMEs.
• It is designed to help smaller companies attract and retain key employees.
• Under and EMI the company grants options to selected employees to purchase shares at no less than the nominal value of the shares.
• The exercise time must be consistent with commercial or retention reasons.
• The increase in value from market value at date of grant to value at date of exercise is free of income tax as long as the underlying shares over which the option is granted does not exceed £120,000.
• The increase in value is instead subject to the Capital Gains Tax regime (18% or 28%)
• To qualify for EMI the company and employee must past a number of strict eligibility tests.