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Good news on share options

The Enterprise Management Incentive (EMI) Share Option Plan has obtained State Aid approval from the European Commission (EC).

Apparently, the government has convinced the EC that the tax incentive on share options provided under EMI is important in enabling small firms to recruit and retain highly skilled employees.

As part of this there has been a change in the rules.  Currently, a qualifying company’s activities must be 'wholly or mainly' in the UK. Going forward, probably from next year, a company is only required to have a 'permanent establishment' in the UK. This change will enable companies based in the UK with considerable overseas activity to use EMI options.

The EC approval will last until 2018.

Currently low share prices and the widening of the eligibility criteria, is expected to encourage take-up amongst high growth firms.

Cathy Corns is a tax adviser and a partner at Mercer & Hole. The views given in this blog are personal to the author.



Date: 18th September, 2009
Author: Cathy Corns


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