EMI Options

Since October 2006, age discrimination in the UK in employment-related situations has generally been unlawful. This practice note explains the impact of the age discrimination rules on employee share schemes and considers how to avoid discrimination claims. When the legislation was introduced, many practitioners thought that age discrimination cases would affect employee share plans, but to date, there has only been one reported case in this area, and little subsequent interest in the issues. In part this is because retiring employees are often favoured, rather than discriminated against, under share plan rules.  As a result, in spite of a range of potentially complex legal problems for share plans, the age discrimination rules have had little practical impact on share plans practice. For a checklist based on this note, see Checklist, Age discrimination and employee share schemes.

Companies have a legal obligation to provide information to HM Revenue & Customs (HMRC) regarding The operation of tax-favoured share incentive arrangements. "Reportable events" in relation to non-tax favoured "employment-related securities" and "employment-related securities options. These are reported on form 42 (for more details, see Practice note, Form 42: annual reporting obligations for employee securities (except tax-favoured arrangements).  This practice note focuses on the return forms companies must use to report events in relation to tax -favoured share plans: Form 34 for SAYE option schemes. Form 35 for CSOPs. Form 39 for SIPs. Form 40 for EMIs.  

EMI options may be granted to one employee over shares worth more than the individual limit over a three year period in certain circumstances.

A summary of the key features of EMI option schemes.

This brief note outlines the main pitfalls to avoid when giving advice on EMI options.

EMI options can only be granted over shares in companies which meet a trading activities test.

HMRC issues various forms for use in connection with employee share schemes, some for particular tax years. To suggest further forms which you would like to access from this page, please e-mail the PLC Share Schemes & Incentives professional support team at incentivesfeedback@practicallaw.com.

This practice note looks at the tax treatment of UK tax advantaged share schemes compared with unapproved share options, with a particular focus on: The interaction of income tax and capital gains tax (CGT); and  The impact of the CGT changes announced in the June 2010 Budget (which took effect on 23 June 2010), for CSOP options, EMI options, SAYE options and share incentive plans.

This practice note considers the requirement that participating employees and/or their associates must not have a material interest in the company whose shares are used for tax-advantaged share incentives. It includes the special rules relating to employee benefit trusts and other discretionary trusts.

Fewer private than listed companies offer share incentives even though share plans can provide advantages for private companies. This note explains the share scheme issues specific to private companies and how they might be resolved.

This note explains how employees holding shares, interests in shares, share options and share awards are dealt with when the shares of a private company are sold under a sale and purchase agreement. It also considers the practical issues companies may need to address in relation to employee share options and awards on a share sale.

A table summarising how the various limits for the tax-favoured share schemes apply to employees who are employed by more than one company at the same time.