Our Services

EMI Share Option Schemes

To a company wishing to retain its key employees and recruit new people, the promise of sharing in the equity of the business can be an important incentive to offer. However, giving shares to an employee is likely to create an immediate tax liability for that person. By granting a share option under the Enterprise Management Incentive (EMI) Scheme instead, that tax liability can be deferred until the shares are sold and then significantly reduced. A share option is the right granted to an employee to acquire shares in the future at a defined price.

 For a private company with future plans for a public flotation or to join a public group of companies, a share option scheme will be an attractive incentive to its employees with the prospect of making a capital gain in the future. EMI Schemes are a particular type of share option scheme set up by legislation allowing employees and employers considerable tax relief.

• No income tax or National Insurance payable when options are granted or exercised.
• Capital gains tax payable at only 10% provided the options are held for at least 2 years.
• Corporation tax relief to the company operating the scheme for the costs of running the scheme.

• Advice on the suitability of an EMI scheme and on the issues surrounding the motives for setting up a scheme, at the outset.
• Advice on the most appropriate share structure to achieve the aims of the proposed scheme.
• Drafting the Rules of the EMI Share Option Scheme.
• Share valuation and agreement of that valuation with the Inland Revenue.
• Statutory resolutions and minutes to implement the scheme.
• Share Option agreements for all individual employees participating in the scheme.

Contact: Julian Ratnage julianr@garners.co.uk  Telephone 020 8943 2191 for a free initial consultation.

Garners - Chartered Accountants & Business Development Consultants -
Bermuda House - 45 High Steet - Hampton Wick - Kingston upon Thames - Surrey - KT1 4EH

Registered to carry on audit work and regulated for a range of investment business activities by the Institute of Chartered Accountants in England and Wales

Garners is the trading name of Garners Limited Company Number 4832263 (England)