During April this year, HM Revenue and Customs (“HMRC”) updated their guidance about errors made in online notifications of the grant of an Enterprise Management Incentive (“EMI”) option. It transpires (quite astonishingly in my personal view) that the Employment Related Securities (“ERS”) online system will not...
Flexible share plans Many private companies are keen to implement a flexible employee share scheme and will frequently choose a discretionary scheme such as Enterprise Management Incentives (EMI) or Company Share Option Plan (CSOP). These schemes allow the directors to choose the individuals who will benefit under...
When submitting an Enterprise Management Incentive (EMI) valuation to HMRC for comment, a VAL231 form must be included with your submission. The form includes information like the company name, agent details, proposed values and number of share being offered under option. To date the form...
The need for guiding principles It’s easy to get lost in the complexity of regulations and tax rules around employee share schemes. There are no clearly, readily understandable principles or policy objectives defined in the regulations themselves. Instead, the regulations and tax rules are the result...
Companies that operate EMI options, and employees participating in EMI schemes, benefit from significant tax reliefs. However, companies should be aware that there are a number of events that can cause the options to become disqualified, resulting in a potential loss of the tax reliefs. Tax...
When a company becomes a subsidiary of another company, it clearly loses its independence – this is a fundamental test for any company that wishes to grant EMI options. However, the EMI independence test is much broader than just looking at share capital ownership. An EMI...
One of the tests for a company to qualify for EMI share schemes is that it is not “a 51% subsidiary” of another company – i.e. no more than 50% of the company’s share capital is owned directly or indirectly by another company. This test...
If your company has made a loss and you want to claim Corporation Tax loss relief, the company must be carrying on a trade “with a view to the making of a profit in the trade or so as to afford any reasonable expectation of...
The Enterprise Management Incentive (EMI) legislation is complex and once you have set it up, there is no guarantee that you won't inadvertently do something to negatively impact its approved status. Unfortunately there are a number of ways that the scheme benefits can be lost. Sometimes...
