Increase in EMI limit
6 July 2012
In the Budget of earlier this year, the Chancellor announced a number of changes to the regime governing enterprise management incentive (EMI) options (see our previous update for more information).
One of these changes was an increase in the EMI limit from £120,000 to £250,000 per eligible employee. We are pleased to let you know that this came into effect on 16 June 2012.
This means that the maximum value of shares over which an employee may hold EMI options is now £250,000. Any subsisting EMI options and options held under an HMRC approved company share option scheme must be taken into account for the purposes of the limit.
If you operate an EMI scheme, we would recommend that you review the rules and/or option agreements to ensure that EMI options may be granted up to the new £250,000 limit – it may be necessary to amend them before making further grants. Prior to granting any options, it is of course also important to ensure that both the company and proposed option holders qualify under the legislation.
We await the detail on the other changes, including the proposal to extend entrepreneur's relief to gains on shares acquired on the exercise of EMI options. Measures are expected to be introduced in the Finance Bill 2013, and we shall issue a further update at that time.
Please contact your usual Osborne Clarke incentives specialist if you have any queries about the increase in the EMI limit, the drafting of your EMI Scheme or the proposed measures generally.
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