UK Enterprise Management Incentives (“EMI”) schemes and foreign companies

18 January 2012 |

The highly tax efficient share scheme for smaller companies is to be made available to foreign companies.

Background

EMI schemes are the most flexible of the UK’s tax favoured share
option plans and provide generous tax treatment to participating
employees of smaller companies (gross assets of £30 million or less).
Only companies which satisfy the qualifying criteria may grant EMI
options.  One of the qualifying conditions is that the company which is
seeking to grant EMI options must carry out a qualifying trade wholly or
mainly in the UK. This prevents employees of foreign companies, which
would otherwise qualify, from benefitting.

It was originally intended to make an amendment to permit foreign
companies with a permanent establishment in the UK to grant EMI options
from 6 April 2010.  However, due to the general election, this was
postponed.

The proposed amendment is contained within the Finance (No.3) Bill 2010-11 which is expected to become law on 16 December 2010.

Commentary

This is a welcome change to the EMI regime as it will enable
overseas companies with a permanent establishment in the UK to offer EMI
options to their UK tax-paying employees.  In an uncertain economy EMI
options are a particularly tax effective cash-free method of
remunerating and incentivising employees.

Resources

UK Enterprise Management Incentives (“EMI”) schemes

For further information or to discuss the issues raised, please get in touch.

Disclaimer

Content is for general information purposes only. The information provided is not intended to be comprehensive and it does not constitute or contain legal or other advice. If you require assistance in relation to any issue please seek specific advice relevant to your particular circumstances. In particular, no responsibility shall be accepted by the authors or by Abbiss Cadres LLP for any losses occasioned by reliance on any content appearing on or accessible from this article. For further legal information click here.

Circular 230 disclosure

To ensure compliance with requirements imposed by the IRS and other taxing authorities, we inform you that any tax advice contained in this article (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

The author


D:
T:
F:

Also by the author

13 January 2021
How to apply for certificate of residence in the UK
13 December 2013
Another victory for the UK Revenue against income tax avoidance
6 December 2013
Autumn statement 2013: Good news for employee share ownership and other welcome tax breaks
Subscribe to our newsletter
Stay up to the minute on our latest news and insights?