UK: UK Enterprise Management Incentives (“EMI”) schemes and foreign companies
January 12, 2010
The highly tax efficient share scheme for smaller companies is to be made available to foreign companies.
EMI schemes are the most flexible of the UK’s tax favoured share option plans and provide generous tax treatment to participating employees of smaller companies (gross assets of £30 million or less). Only companies which satisfy the qualifying criteria may grant EMI options. One of the qualifying conditions is that the company which is seeking to grant EMI options must carry out a qualifying trade wholly or mainly in the UK. This prevents employees of foreign companies, which would otherwise qualify, from benefitting.
It was originally intended to make an amendment to permit foreign companies with a permanent establishment in the UK to grant EMI options from 6 April 2010. However, due to the general election, this was postponed.
The proposed amendment is contained within the Finance (No.3) Bill 2010-11 which is expected to become law on 16 December 2010.
This is a welcome change to the EMI regime as it will enable overseas companies with a permanent establishment in the UK to offer EMI options to their UK tax-paying employees. In an uncertain economy EMI options are a particularly tax effective cash-free method of remunerating and incentivising employees.
UK Enterprise Management Incentives (“EMI”) schemes
For further information or to discuss the issues raised, please contact Guy Abbiss (email@example.com) or Stephen Wright (firstname.lastname@example.org) on
+44 20 3051 5711.
CELIA Alliance members are identified here. Members of the CELIA Alliance are each independent law firms and do not practice law jointly with any other member of the CELIA Alliance. “CELIA Alliance” and “CELIA” are not trading names. For more information about the CELIA Alliance click here.
Content is for general information purposes only. The information provided is not intended to be comprehensive and it does not constitute or contain legal or other advice. If you require assistance in relation to any issue please seek specific advice relevant to your particular circumstances. In particular, no responsibility shall be accepted by the authors or by Abbiss Cadres LLP for any losses occasioned by reliance on any content appearing on or accessible from this newsletter. For further legal information click here.
If you would like to copy or otherwise reproduce this article then you may do so provided that: (1) any such copy or reproduction is for your own personal use or if it is made available to any third party it is done so on a free of charge basis; and (2) the article is reproduced in full together with the contact details, disclaimer and any logos as they appear on each article.