There is uncertainty for companies proposing EMI Share Options following State Aid expiry, explains corporate partner Giles Dunning.


HMRC published Employment Related Securities Bulletin No 27 on 4 April 2018. This bulletin contains an important update for companies on Enterprise Management Incentive (‘EMI’) Share Schemes, especially those companies considering granting new EMI share options in the near future.

What is the EMI share options scheme?

EMI share schemes are a tax regime that requires EU State Aid approval for the granting of share options.

EU State Aid approval for the EMI scheme expired on 6 April 2018.

What happens next?

Any share options that are granted from 7 April 2018 until EU State Aid approval is received are potentially not eligible for the tax advantages currently available to option holders, as such any EMI share options granted in the above period may be considered as non-tax advantaged employment related securities options.

Should companies delay employee share options?

HMRC suggest that companies may wish to consider delaying the grant of employee share options intended to qualify as EMI share options until fresh EU State Aid approval has been given.

EMI options already granted

HMRC considers that share options granted up to and including 6 April 2018 will not be affected by the lapse of approval.

This temporary lapse of approval and the short notice is not ideal and unfortunately there is no clarity as to how long the period of uncertainty will last. HMRC has said that “the government is working hard to ensure this period is as short as possible”

For advice on EMI share options schemes or any other corporate law issue please contact our corporate law team.  Giles Dunning on 01872 265100 email , Simon Morris or Catherine Carlton on 01392 210700 email