EMI options - a current risk
EMI options are the favoured route for most SME’s to provide share incentives to staff. However, EU State Aid approval for the EMI scheme expires on 6 April 2018. The government has been following the process of applying to the EC for fresh approval but the final response has not yet been received and is not now expected before 6 April 2018. This is causing a real problem.
There will be a period between 6 April and the decision by the EC on a fresh approval. HMRC has stated that share options granted up to and including 6 April 2018 will not be affected by this lapse of the approval. However, EMI share options granted in the period from 7 April 2018 until EU State Aid approval is received may not be eligible for the expected tax benefits in fact they may be treated as unapproved options with the consequent tax effects.
Consequently, any affected companies should consider delaying the grant of employee share options intended to qualify as EMI share options until fresh State Aid approval has been given.
If you would like any help on this or to discuss the issues please do get in touch.
Date: 4th April, 2018
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