ETASSUM50100 - Enterprise Management Incentives (EMI): Introduction

Schedule 5 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA)

EMI options can be granted by independent trading companies with gross assets not exceeding £30 million.

Options over shares with an unrestricted market value (UMV) at the date of grant up to £250,000 (including any amount granted under a Schedule 4 CSOP) can be granted. The £250,000 limit applies from 16 June 2012; prior to that date, the individual limit was £120,000. There will normally be no income tax or NICs when the options are exercised.

There is no approval process or clearance mechanism for EMI, however there is a requirement on companies to notify HMRC when an option is granted. For options granted on or after 6 April 2024 the notification of the grant must be notified by 6 July following the end of the tax year in which the options were granted. Prior to 6 April 2024 the options granted must be notified within 92 days of the grant. In addition there is also an annual reporting requirement.

A company can request an advance assurance that it meets the qualifying conditions (see ETASSUM52020)

All references in this guidance are to Schedule 5 ITEPA unless otherwise stated.