Earlier this year HMRC issued a statement confirming that EU State aid approval for Enterprise Management Incentive (EMI) schemes in the UK would expire on 6 April 2018. The state aid approval essentially allowed UK companies to grant options over shares under EMI schemes with considerable tax advantages if certain criteria were met. These included the potential to exercise options tax-free. Any gains on share sales realised after the options were exercised attracted tax at the rate of only 10%.
The removal of EU state aid approval meant that EMI options lost their tax advantages making such schemes less attractive than they were before.
However today the European Commission confirmed that it has reissued the state aid approval for EMI schemes. SGD welcomes this move as it ends a period of uncertainty for companies throughout the UK. The grant of EMI options going forward will now be able to benefit from the same tax benefits as before.
If you have any queries about EMI schemes please contact David Thomas.