Companies may wish to delay granting employee share options, intended to qualify for tax reliefs under the EMI scheme, until fresh EU State Aid approval has been given.
If your business is thinking of granting further share options to your employees, you should be aware of HMRC’s recent bulletin on EU State Aid approval for the EMI Scheme.
EMI schemes are in fact a form of state aid to companies that grant EMI options – and therefore require approval from the European Commission. The current EU State Aid approval for the EMI scheme expired on the 6th April 2018 and fresh approval, whilst sought, has not yet been granted.
What does this mean for EMI schemes?
- Share options granted up to and on the 6th April 2018
These options will be unaffected and the tax reliefs offered by HMRC through the scheme will still be available - Share options from 7th April 2018 until EU State Aid Approval is received
Options granted from 7th April may not be eligible for the tax advantages presently available to option holders and may fall to be treated as non-tax advantaged employment-related securities options.
Therefore, you may wish to hold back on granting employee share options, aimed to qualify for tax reliefs under the EMI scheme, until approval has been given.
For further information:-
Employment related securities bulletin No 27 (April 2018)
Employee Tax Advantaged Share Scheme User Manual
If you would like to discuss the EMI scheme in greater detail, please do get in touch with the DRG Chartered Accountants team.
