ERSM304100 - Enterprise Management Incentives: Overview
EMI options can be granted by independent trading companies with gross assets not exceeding £30 million.
Options over shares with an unrestricted market value (UMV) at the date of grant up to £120,000 (including any amount granted under an approved CSOP) can be granted. (Up to and including 5t h April 2008 the limit was £100,000).
There will normally be no income tax or NICs when the options are exercised
There is no approval process or clearance mechanism for EMI, but a simple requirement on Employing Companies to notify HMRC within 92 days of when an EMI option is granted In addition there is also an annual reporting requirement.
ESSU does not administer EMI options (although ESSU does provide Policy support). Any enquiries should be addressed to:
Small Company Enterprise Support Centre
CRI
Ty Glas
Llanishen
Cardiff
CF14 5ZG
Annual reporting requirement
On the first working day after the end of the tax year (usually 6 April) a notice to file an annual return is issued to all relevant companies who have either notified HMRC of the grant of qualifying EMI options during the tax year or are known to have subsisting EMI options from previous tax years. A pdf version of Form EMI40 is available for download from the shareschemes web page or from the useful forms section of the Employer CD-Rom issued annually to employers.
Section 1 requires details of any adjustment to options following a variation in the share capital of the company whose shares are under option.
Section 2 requires details of any exchanges of options due to a change of control
Section 3 requires details of any options assigned, released or lapsed regardless of whether or not consideration was paid
Section 4 requires details of any disqualifying events that have incurred in relation to individual options
Section 5 requires details of all options exercised where tax relief is due
Section 6 requires details of all options exercised where no tax relief is due
Section 7 affords an opportunity to indicate that there has been no activity during the year
Section 8 requires summary details of numbers of option holders (at start & end of year) and the total UMV of all options held at the end of the tax year. This section is not required to be completed if there has been no activity during the tax year and the box in section 7 has been ticked.
